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ANTI-GROWTH TAX CUT?(ISSUES & INSIGHTS)(EDITORIALS)
Thank heaven for small favors. The tax bill has passed, it's signed and somerelief will be getting to taxpayers as early as this year. Bravo. But sometimes, in the compromised sausage factory that is Washington, everything doesn't get done right.
Much was made of the size of the Bush tax cut: $1.35 trillion over 11 years.A recent study by Instinet Research showed the economy's likely to get a good bounce from the tax cut -- especially if the Fed keeps an easy monetary stance (see chart).
But long term, what will the tax cut do? Well, Treasury Secretary Paul O'Neill says it will boost GDP by about 0.5%, or around $50 billion a year. That's not huge, but it ain't bad, either.
Still, we have some concerns. Call us perfectionists, but we think the tax cut could have been better. Much better.
To begin with, it's not big enough. We know, you've heard over and over about the "massive" Bush tax cut. But $1.35 trillion over 11 years isn't reallythat much, about $122 billion a year.
Put it in perspective. The government expects GDP of about $133 trillion over that time. Government's take will total about $27.9 trillion, and the total surplus will be about $5.6 trillion. So $1.35 trillion is a drop in the bucket, about 1% of GDP, 5% of expected taxes and 24% of the surplus.
Right now, the federal government takes 20.5% of the entire economy. That's about $16,500 from each working American every year. How big does this year's planned $300 tax rebate sound now?
- Tax cuts as 'stimulus' - a global reality check; Is President Bush proposing...
- Newspaper article from: The Christian Science Monitor January 10, 2003 700+ words
...year, $670 billion tax-cut proposal a "growth package...economists do hold that tax cuts usually have an immediate...maintains that the Bush tax cuts would boost the federal...more than offsetting any tax-cut stimulus. Tax cuts a gl
- TAX-CUT TACTICS.(Bush's proposed tax cuts not popular because more Americans...
- Magazine article from: PR Week (US) February 10, 2003 700+ words
How do you sell tax cuts to people who don...trying to sell a tax cut - something that...says. 'Logically, tax cuts have nothing to do...expanding the 2001 tax cut ranked last. 'People...pushing relentlessly on tax cuts as the solution to...
- Budget 'leak' dampens tax-cut hopes of big tax cuts dashed
- Newspaper article from: The Independent - London COLIN BROWN Chief Political Correspondent November 25, 1995 700+ words
...face renewed pressure from Tory MPs over the weekend to go for tax cuts of at least pounds 5bn, financed by cuts in public expenditure...pledged that it would bring in a 10p starter rate for income tax, cut VAT on fuel to 5 per cent and levy a windfall tax on the profits...
- Democrats, Bush's tax cut and the budget.(Democrats blame tax cuts for budget...
- Newspaper article from: The Kiplinger Letter September 6, 2002 700+ words
Democrats blame Bush's tax cut for the budget deficit's return. But they won't push a repeal...effective, to play the blame game. Meanwhile, Bush will seek MORE tax cuts, betting that voters' concerns about their own finances outweigh...
- ALBANY MAY NOT APPROVE MANY PROPOSED TAX CUTS: AFTER CORPORATE TAX CUT...
- Magazine article from: Crain's New York Business August 2, 1999 700+ words
...negotiators settled on $250 million in tax cuts, it appears increasingly likely...to extend last year's corporate tax cut to banks and insurance companies...proposals, including $150 million in tax cuts for utilities and energy suppliers...
- Doing the tax-cut two-step.(Bush and Gore on possible tax cuts)(Statistical...
- Magazine article from: U.S. News & World Report Butler, Steven Longman, Phillip J. September 4, 2000 700+ words
...000, would get an average tax cut of $42,072, amounting...limit the amount you devote to tax cuts, you have to target it to...government, making it less of a tax cut than a direct subsidy. The...surplus that is available for tax cuts or
- Tax-cut momentum waning; Congress is debating whether to extend tax cuts...
- Newspaper article from: The Christian Science Monitor November 29, 2005 700+ words
...presidency on opposing tax cuts that they say primarily...have supported Bush tax cuts in the past, a vote on the tax-cut bill pending in the...from the politics of tax cuts earlier in the Bush...1.35 trillion tax cut that reduced individual...
- TAX CUTS : All the public policy Bush needs.(tax-cut bill campaign in...
- Magazine article from: Commonweal DIONNE Jr., E.J. March 23, 2001 700+ words
...also substantive: If this tax cut is really about stimulating...first term? Why not pass a tax cut for the next year or so...this argument to make the tax cut bigger. In fact, they...theory, they'd void future tax cuts if the surpluses didn...
