June 7: A Date That Will Live in Fiscal and Economic Infamy

Chuck Sheketoff

In the annals of this nation’s fiscal and economic history, June 7 is surely a date that will live in infamy. Ten years ago, on June 7, 2001, then-President George W. Bush signed into law a package of tax cuts that would transform surpluses into deficits and inflict serious damage on our nation’s fiscal health.

To mark this disastrous policy, the Economic Policy Institute has released 10 facts to note about the Bush-era tax cuts on their 10th anniversary (PDF). Those 10 facts, with data to back them up, are:

1. The Bush tax cuts disproportionately benefited the wealthy
2. The Bush tax cuts did little for low-income families
3. The Bush tax cuts never trickled down
4. The Bush tax cuts were a poorly designed economic stimulus
5. The Bush tax cuts failed to create strong long-run growth
6. The Bush tax cuts were so expensive that they added greatly to the debt
7. The Bush tax cuts were much more expensive than advertised
8. The Bush tax cuts continue to be expensive
9. The Bush tax cuts eliminated the most progressive federal tax: taxes on large estates
10. A decade of Bush tax cuts are increasing interest spending today

Unfortunately, the Bush-era tax cuts live on, as the Obama Administration signed a two-year extension in December 2010.

President Obama reportedly has said that next time around he won’t compromise on extending the tax cuts for the wealthy, but congressional Republicans are expected to press the issue.

What would extending the Bush tax cuts mean for the nation?

According to Citizens for Tax Justice, extending the Bush tax cuts (PDF) would mean that that the richest one percent of the nation’s taxpayers would get an average tax cut of $68,079 in 2013. Meantime, the bottom 60 percent of taxpayers would get an average tax cut of $487.

In Oregon, the richest one percent of the state’s taxpayers would get an average tax cut of $44,835 in 2013, while the bottom 60 percent of taxpayers would get an average tax cut of $483, according to CTJ’s analysis (PDF).

For the nation as a whole, extending the tax cuts would mean that the nation’s debt relative to the economy would continue to grow. Stated differently, letting the Bush tax cuts expire would quickly stabilize the nation’s debt situation, according to the Center on Budget and Policy Priorities.

Let’s hope that President Obama does draw the line in the sand on the Bush tax cuts, lest this date grow in its degree of infamy.

Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

By Chuck Sheketoff June 06, 2011