The Bush tax cuts led to a massive deficit
I confess that I remain absolutely stunned by the enthusiasm on the right for allowing the wealthiest Americans to keep very low tax rates. Though Republicans claim to care about the deficit, they don’t want to raise taxes on that two percent — two percent! — of Americans who earn more than $250,000 a year. What is that about?
Because Americans have such short memories, it may be helpful to go back and recount the debate that was taking place Congress in 2001, the year that Bush pushed through his massive tax cuts. While the GOP has painted the Democrats as fiscally irresponsible, Democrats corrected predicted that the tax cuts would lead back to an era of massive deficits. (The chart below shows that.)
From The New York Times, Feb. 28, 2001:
Democrats Cite Deficit Fears In Opposing Bush’s Tax Plan
The Democratic leaders of Congress tonight signaled a muscular battle against President Bush’s signature $1.6 trillion tax cut, charging that it threatens the future fiscal health of Social Security and Medicare and could lead the nation back to an era of deficits.
Vying with Mr. Bush for public opinion, Senator Tom Daschle of South Dakota and Representative Richard A. Gephardt of Missouri raised doubts about whether his numbers were sound and his tax cuts fair to the middle class in the televised Democratic response to Mr. Bush’s address to a joint session of Congress.
At the same time, they presented their own party as a centrist steward of fiscal responsibility, showcasing the Democrats’ call for a smaller tax cut, of below $1 trillion, and more money devoted to debt reduction as the responsible course for the era of surpluses.
”If what we heard tonight sounds too good to be true, it probably is,” said Mr. Gephardt, who was sitting side by side with Mr. Daschle in a Capitol library. He said Mr. Bush’s tax cut means ”he cannot possibly keep his commitment to leave no child behind.” And he said Mr. Bush ”fails to set aside the resources Social Security and Medicare will need” as baby boomers retire and strain the retirement system.
Gephardt and Daschle had a good crystal ball — or sound common sense.
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Guides
Visitor Agreement | Privacy Statement
© 2012 The Atlanta Journal-Constitution
304 comments Add your comment
Alatsea
September 14th, 2010
8:09 am
Why is always GOP and white people with you?
Wow, that's Pulitzer material
September 14th, 2010
8:13 am
No, out of control spending leads to huge deficits. Tax cuts are a joke that has grown old, get a new one.
Wow, that's Pulitzer material
September 14th, 2010
8:17 am
let us vote out all incumbents and outlaw pork, then you will have the correct change. After that we can end entitlement handout programs and close the border. Doing those things will cure deficit spending for our grandchildren. Now there’s some hope for ya.
ctucker
September 14th, 2010
8:19 am
Alatsea@8:09, I’m afraid I didn’t understand the question.
Wow, that's Pulitzer material
September 14th, 2010
8:22 am
insert it after is for the question
Peadawg
September 14th, 2010
8:22 am
The Bush tax cuts and out-of-control spending by Bush AND Obama led to a massive deficit.
Fixed your typo, Cynthia.
“I confess that I remain absolutely stunned by the enthusiasm on the right for allowing the wealthiest Americans to keep very low tax rates.”
I agree.
Alatsea
September 14th, 2010
8:24 am
I just read it and didn’t understand it either. Rough seas ans and a shaky up-link or I should get some sleep. Sorry
Metro Coach
September 14th, 2010
8:25 am
Increased spending leads to massive deficits. We could cut taxes to 0 and as long as we spent 0 nothing would be added to the deficit. What added to the deficit was politicians both R and D, who think like you and believe that government is the cure for everything that ails us spending the country into oblivion. Tax curts work, but Congress(controlled by Dems since 2006) hasn’t cut spending to match the decreased revenue. as usual, you only tell the half of the story that suits your massively distorted view of the role of government and your race baiting tendencies. Every person who balances a checkbook knows if you only take in $100 you can’t spend $250. Well, everyone but a progressive politician.
Metro Coach
September 14th, 2010
8:28 am
Also, the “wealthiest Americans” are those who own small businesses, or in other words, job creators. Since you’ve had you head…in the sand, you obviously don’t understand that small business owners business expenses and profits are added to their personal income taxes, therefore putting them in that magical “250K” mark that Obama keeps talking about.
Cynthia Is Sexy!!
September 14th, 2010
8:29 am
“But as Heritage analyst Brian Riedl has pointed out, given that Obama has already helped quadruple the deficit with his stimulus package, pledging to halve it by 2013 is hardly ambitious. The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.
What’s driving Obama’s unprecedented massive deficits? Spending. Riedl details:
President Bush expanded the federal budget by a historic $700 billion through 2008. President Obama would add another $1 trillion.President Bush began a string of expensive financial bailouts. President Obama is accelerating that course.President Bush created a Medicare drug entitlement that will cost an estimated $800 billion in its first decade. President Obama has proposed a $634 billion down payment on a new government health care fund.President Bush increased federal education spending 58 percent faster than inflation. President Obama would double it.President Bush became the first President to spend 3 percent of GDP on federal antipoverty programs. President Obama has already increased this spending by 20 percent.President Bush tilted the income tax burden more toward upper-income taxpayers. President Obama would continue that trend.”
Cynthia Is Sexy!!
September 14th, 2010
8:31 am
http:// sayanythingblog.com/entry/obamas_deficit_vs_bush_deficit/
paleo-neo-Carlinist
September 14th, 2010
8:31 am
I believe it was the erudite student of the American experience, Leona Helmsley who averred; “…only little people pay taxes.”. I return to yesterday’s musings about the nature and influence of language. businesses (corporations) earn revenue, but individuals earn income. and yet the Internal Revenue Service taxes income and not revenues (just as the accurately named Department of War became the inaccurately baned Department of Defense). what Americans cannot seem to grasp is the reality that $250,000 per year in income makes one a “little people”. in addition, the letting the Bush tax cuts “expire” is not a tax increase; it is the expiration of a tax cut. the supply siders and the trickle down folks can yammer all they like about how once upon a time, tax cuts actually increased tax revenues, and they may be right. but it is not longer 1982. Bush’s tax cuts increased the deficit (regarless of what Obama has contributed since taking office). I loathe taxes as much as the next person, but the Bush Tax cuts are a de facto sales tax holiday, with the only difference being they lasted 10 years instead of 24 hours. when we balance the budget and eliminate the the federal deficit we can revist tax cuts. sure spending has to be addressed moving forward, but doing so will merely help the former (balance future budgets) and not the latter (pay down the debt).
paleo-neo-Carlinist
September 14th, 2010
8:36 am
OH, and you want to know how corporations can “right the ship”? pay everyone $250,000.00 per year, which will mean 20-30% of Americans will “pay more taxes” as opposed to the 2-3% who are hoarding wealth (and not paying taxes because the wealth is places in trust funds, offshore accounts, etc.).
SouthernGal
September 14th, 2010
8:36 am
I propose raising Cynthia’s tax rate to 45%!
Call it like it is
September 14th, 2010
8:37 am
Right now is not the time for it. The Rebublicans know it and even the Democrats are backing off of it. You do not raise taxes while the economy is trying to recover. You let those taxes go up at the beginning of the year and just watch what happens to the stock market.
paleo-neo-Carlinist
September 14th, 2010
8:41 am
Call it like it is; the stock market? do you mean like what “happened” in October 2008? any decline in the stock market will be the aforementioned wealth hoarders taking their marbles and going home. the stock market is in flux because corporations are hoarding cash (not paying dividends) and devaluing the stock. in addition, hedge funds are obviously aware, so they are shorting stocks, which also produces sell-offs.
The Nerve
September 14th, 2010
8:43 am
Why don’t we address spending first………BEFORE punishing a group of taxpayers that already pay an enourmous portion of the tax burden?
teamguy
September 14th, 2010
8:44 am
I would be willing to pay more taxes if I thought there was even an outside chance that those in position to change our spending habits would do so. I am for increasing revenue in any way possible. But, at my house, when we need to come up with a little extra money, we don’t always go looking for ways to make a few more bucks. Sometimes, we make changes in spending habits, which amount to the same thing. Maybe the government can do the same thing. Then, once the deficit is under control, make it illegal to spend on any program for which we have to borrow.
Union
September 14th, 2010
8:46 am
“I confess that I remain absolutely stunned by the enthusiasm on the right for allowing the wealthiest Americans to keep very low tax rates.”
should read –
I confess that I remain absolutely stunned by the enthusiasm on the right for allowing the wealthiest Americans to keep more of what they have worked hard to earn.
Wow, that's Pulitzer material
September 14th, 2010
8:47 am
Either way Paleo-neo-carnalist, the marbles are theirs to do with as they please. They earned them and you can’t stand it. Socialism is a disease that must be cured with a dose of capitalism.
Tech Man
September 14th, 2010
8:49 am
Federal Spending lead to the massive deficit.
ctucker
September 14th, 2010
8:49 am
Metro Coach@8:28, I have no idea where you got your information about small businesses, but most small business owners do not earn $250,000 a year in income.
paleo-neo-Carlinist
September 14th, 2010
8:50 am
team guy, picture a “house” with several hundred, self-absorbed, delusional siblings who have NEVER been responsible for anything but spending? add to this the fact that this “house” claims to know what is best for YOUR house, and charges you a consulting fee as a result. they don’t represent us and until Americans “lobby” at the ballots, nothing is likely to change. and replacing Democrats with Republicans in two months is not “change”.
Wow, that's Pulitzer material
September 14th, 2010
8:50 am
Why do corporations need to right the ship? Congress made this deficit, not the corporations. Oh I forgot, you are a socialist.
Tony
September 14th, 2010
8:51 am
Keith Hassett of Bloomberg has an excellent op ed that discusses the fight between Obama and Boehner regarding tax and economic policy.
ctucker
September 14th, 2010
8:52 am
Metro Coach@8:25, You are discarding facts right and left. When Clinton left office, the budget was balanced. And the economy was humming along nicely. The deficit did not start in 2006, when Dems took control of Congress. The deficit spiralled after Bush’s massive tax cuts and two unfunded wars. Those are simple facts. So sorry the facts have a “liberal bias.”
Wow, that's Pulitzer material
September 14th, 2010
8:52 am
Bloomberg? really?
Bubba Bob
September 14th, 2010
8:54 am
ctucker,
The $250,000 for small business owners is a very true figure. Most have to report all of their income (gross income) as income for themselves since it’s usually an LLC. I know several small business owners who gross over $250K but may bring home $50,000/year.
There should be a way to tax over $250K but not tax LLCs like that. They should be able to take better deductions.
Wow, that's Pulitzer material
September 14th, 2010
8:54 am
No, CT you’re wrong. Congress balanced the budget, not Clinton. Congress voted for the spending in both wars.
The Nerve
September 14th, 2010
8:54 am
We could also ask how the Democrat Party, especially the far left side of it, now likes to promote that the tax cuts are the reason for the defecit.
How about the fact that it is the spending? But again, I understand why. The Democrat Party has to promote entitlement programs, wealth envy, class warfare and hate in order to stay in power.
Bubba Bob
September 14th, 2010
8:54 am
ctucker,
Who voted in Congress to fund the tax cuts and the two wars? Bush? I didn’t think he was in Congress.
Shawny
September 14th, 2010
8:55 am
What is missing from the graph is entitlement spending. I think that has something to do with increasing deficits too.
And Boehner said he would support cuts minus the top 2%. So don’t label the GOP with your typical broad brush.
Over the River
September 14th, 2010
8:55 am
Who are the people pulling BO’s strings. No single person could be as inept as the pres appears to be. He is but a puppet and a mere talking head, he is not a leader.What is the purpose of driving the country into bankruptcy? What will these people behind the man with big ears gain? They need to stop spending and how can they be so stupid not to see it? Government take over will lead to socialism. Who wins there? If the left is afraid of the tea party now wait until they create a socialist atmosphere. They have destroyed the country in 20 months. That is leadership? and in typical head in the sand left wing approach they make fun of Boehner’s tan and chain smoking. Do they have a clue what the American people think? Ramming healthcare down our throats with over 50% of the people against it. And spending money that does not exist, where is the fiscal responsibility? Time to kick them to the curb.
Bubba Bob
September 14th, 2010
8:57 am
Several Dems voted for the wars. Can’t blame it all on Bush.
I gotta run early today. You all have fun.
Wow, that's Pulitzer material
September 14th, 2010
8:58 am
Once again Ms. Tucker has tried to blame it all on Bush and those pesky tax cuts. The funny part is that she actually believes this PIFFLE.
The Taxman Cometh
September 14th, 2010
8:59 am
We’re broke. We all know it. When the muni. bonds become insolvent then the fit starts hittin’ the shan. Next print more $$ from the Treasury, and finally the Fed defaults on the big boy bonds. It’s all coming…just like the Taxman, Jan. 1.
Jimmy62
September 14th, 2010
8:59 am
ctucker: Ever run a small business? Just because you don’t end up with an extra $250k at the end of the year doesn’t mean you won’t be taxed that way. And if you’re married, your household income could also be bumped up to over $250k. So many of your statements are things that are easily debunked, like when you or Bookman say something like, “Nobody is going to avoid getting a job because their unemployment benefits were extended,” a point which is exactly debunked by two lazy friends of mine who fake looking for a job so they can continue pulling unemployment and watching a lot of TV. And the “few small business owners make more than $250k” is debunked by my experience of knowing two small business owners, both of whom do get taxed on at least that much income, and one of whom is planning on closing his business and laying off his workers in the next few months because he’ll make more by retiring and investing, due to new tax punishments and regulations like the new additional paperwork on all transactions over >$600, for which he thinks he’ll have to hire 1.5 full time employees to do, and it’s just not worth it.
But you guys say none of that is true based on… Fantasy? Wishful thinking? Obviously not reality.
If the government makes some serious moves to cut spending, moves that make the American people confident that our politicians aren’t just jerking us around again, then we might be amenable to some reasonable new taxes. But not if the politicians refuse to make some serious spending cuts. What reason have they given us to trust them (GOP or Dems) on economics?
Ponder
September 14th, 2010
9:00 am
“…they don’t want to raise taxes on that two percent — two percent! — of Americans who earn more than $250,000 a year. What is that about?…”.
What is that about? Let me tell you — my wife and I (and our families) put ourselves through undergrad, graduate and professional schools (incurring significant student loans, which we have paid back!). Why should we continue to be penalized for our success? Where does paying our “fair share” end???
Wow, that's Pulitzer material
September 14th, 2010
9:00 am
Well, that’s it for today. I’ll check in after work. Be polite while I’m gone please.
Jimmy62
September 14th, 2010
9:05 am
Ponder: You have to understand…. The left thinks you should be a slave for your success. And if they gets your way, 60% of your income will go to various government entities, making you a virtual slave. In fact, I would go so far as to say that anything over 1/3 of income is slavery, where we are forced to work not for ourselves, but for a bunch of bureaucrats and politicians.
Over the River
September 14th, 2010
9:05 am
Ponder with this admin at the helm, never!
paleo-neo-Carlinist
September 14th, 2010
9:06 am
Wow that’s some pulizter. Do you mean like the marbles Haliburton “earned” via no bid contracts in Iraq? or do you mean like the 800 million “marbles” Merck or Pfizer will “earn” via the Medicare Prescription drug plan? OR, maybe you mean the “marbles” Bank of America “earned” after accepting $45 billion in TARP fund, massive layoffs/outsourcing, which its board of directors kept in the form of (increased) bonuses and executive compensation, while individual investors/shareholders had their dividends slashed to .01. I’m no socialist, sport – but you need to find a new narrative when it comes to your embrace of capitalism. again, check out the words Oligarchy or Plutcracy in the dictionary. Or go watch “Wall Street” and masturbate when Gordon Gecco says; “greed is good”
RVG
September 14th, 2010
9:07 am
Check out today’s Bloomberg Businessweek on the internets:
America’s Wealthy Save Tax Cuts Rather Than Spend, Moody’s Says
It can’t be true…or can it?
At the Switch
September 14th, 2010
9:07 am
It’s the old joke of how much did you make and how soon can you send it to us? Only it’s not a joke anymore.
Keep up the good fight!
September 14th, 2010
9:07 am
Bubba… you may want to do a little research. If a LLC, S corp or other business gross sales exceed $250,000 but after expenses its net is $50k….it does not pay income tax on $250,000. It pays income tax on the net income.
Jimmy62, wow your right. I mean someone who could earn over $250K would much rather be sitting at home watching TV for a few hundred a month that will run out. That proves everything right? If they are scamming the system, maybe you should report them.
Bubba
September 14th, 2010
9:10 am
From the Washington Post story ‘5 myths about the Bush tax cuts’
4. The Bush tax cuts are the main cause of the budget deficit.
Although the cuts were large and drove revenue down sharply, they are not the main cause of the sizable deficit that exists today. In 2007, well after the tax cuts took effect, the budget deficit stood at 1.2 percent of GDP. By 2009, it had increased to 9.9 percent of the economy. The Bush tax cuts didn’t change between 2007 and 2009, so clearly something else is to blame.
The main culprit was the recession — and the responses it inspired. As the economy shrank, tax revenue plummeted. The cost of the bank bailouts and stimulus packages further added to the deficit. In fact, an analysis by the Center on Budget and Policy Priorities indicates that the Bush tax cuts account for only about 25 percent of the deficit this year.
Phil
September 14th, 2010
9:10 am
What a little marxist twit Tucker is, putting up a graph of projections going forward and dropping the context of how we got here.
Thanks, Cynthia Is Sexy, for posting the historical graph and some much needed perspective.
Call it like it is
September 14th, 2010
9:10 am
Cynthia, your main issue is that you keep living in the past. What is “your” president doing to right the ship, besides out of control spending and increased taxes? It seems all of a sudden your man is starting to get scared from the next speaker of the house, Boehner. He has never mention his name is the past, but now has decided to attack, why? Maybe because he has some common sence answers for these issues.
1. Do not raise taxes now. Freeze them for 2 years then and only then if the economy is recovering do you address the issue again.
2. Calls on Obama to veto any lame duck congress issues regarding union organzing, limits to industrial emissions, or any other topic that would hurt business.
3. Repeal the provision in the health car law that requires businees to submit form 1099 for every purchase more thean $600. Most small businesses dont have the bookkeeping resources necessary for this kind of detailed reporting. Needless capital being wasted.
4. Non-defense discretionary spending on domestic programs be immediately cut to 2008 levels. Why? Spending cuts that restore budget discipline can stimulate the economy, even in the short run. This democrat spending spree is scaring the hell out of the American people, and they want to see better management.
And might I add that Obama former budget director Peter Orszag likes the same ideas, hmmmm I wonder if that is why he is Obamas former budget director.
At the Switch
September 14th, 2010
9:11 am
Hey ancient new carlinist, is that George Carlin?
Libertarian
September 14th, 2010
9:11 am
Obama needs to be honest with the American people. He stands on TV and says “the republicans want to give tax cuts to millionaires and billionaires and the rich.” He need to tell the American people how letting these tax cuts expire will hurt small businesses. The average American doesn’t understand how small business taxation works. They believe his propaganda. In their minds these tax cuts expiring will only affect the Oprah’s and Warren Buffets of the world and that simply is not true. Its going to affect your bosses and the people who create jobs.
All all of his BS about giving “breaks” and “incentives” to small businesses are just that: BS.