I don't normally defend George W. Bush on his economic policies. He spent way too much. But one of the canards that has become an article of faith among democrats needs to be exposed, namely that the Bush tax cuts are mostly (or completely, for some) responsible for the mess we're in now. Nonsense.
Bush inherited an economy that was coming back to earth from the dot-com bubble, resulting in a recession from March-November of 2001. As one would expect after a recession, income tax receipts fell from 2001 to 2002, by about 13%, and fell again in 2003, by about 7.5%. But from 2003, when the tax cuts were fully implemented, to 2007, an interesting thing happened. Income tax receipts rose from about $794 billion to $1.16 trillion. This is an increase of 46%. Income tax revenues fell by only about 1.3% in 2008, at which point the Great Recession hit, leading to decreased federal revenues. Of course, the recession was caused by the implosion of the housing bubble, not the tax cuts.
The obvious conclusion is that Bush's tax cuts did not cause a revenue problem for the government. They certainly did not cause the recession. They spurred economic growth, which led to significantly increased revenues. Bush had a spending problem. Unfortunately, Obama has a much bigger spending problem.
Bush inherited an economy that was coming back to earth from the dot-com bubble, resulting in a recession from March-November of 2001. As one would expect after a recession, income tax receipts fell from 2001 to 2002, by about 13%, and fell again in 2003, by about 7.5%. But from 2003, when the tax cuts were fully implemented, to 2007, an interesting thing happened. Income tax receipts rose from about $794 billion to $1.16 trillion. This is an increase of 46%. Income tax revenues fell by only about 1.3% in 2008, at which point the Great Recession hit, leading to decreased federal revenues. Of course, the recession was caused by the implosion of the housing bubble, not the tax cuts.
The obvious conclusion is that Bush's tax cuts did not cause a revenue problem for the government. They certainly did not cause the recession. They spurred economic growth, which led to significantly increased revenues. Bush had a spending problem. Unfortunately, Obama has a much bigger spending problem.
At any rate, I pass this along so that the next time you hear some fool blame the Bush tax cuts for our current dilemma, you'll know that he or she is full of it.
Source of data: Office of Management and Budget
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