Did President George W. Bush’s tax cuts deliver on what he promised 10 years ago?
Speaking on April 16, 2001, at the U.S. Chamber of Commerce, Bush said, “Enough is enough. The American people deserve tax relief.”
He repeated a variation of that statement two more times in the next two paragraphs of his speech.
The president said his tax relief plan would help families and small businesses. Additionally, tax cuts would slow discretionary spending because the government wouldn’t have money to spend.
“[E]xcessive federal spending threatens economic vitality. What we want is a stronger economy, not larger federal government,” said Bush.
“For small businesses, tax relief means more customers and improved cash flow, more money to hire more workers, more money to expand benefits, more money to invest in new technology. Tax relief will create new jobs. Tax relief will generate new wealth. And tax relief will open new opportunities,” said the president.
“[T]ax relief will stimulate creativity and enterprise for individual Americans,” he said. “I firmly believe tax relief means a better life in a more prosperous America.”
On the 10th anniversary of Bush’s tax cuts, Slate, a daily web magazine owned by the Washington Post, evaluated his claims about what tax cuts would do.
1. Bush claimed that tax relief would drive the growth in jobs.
“During the 2001 to 2007 business cycle, America’s economy enjoyed 52 straight months of job growth. But it was sluggish – in fact, the slowest rate of jobs growth on record since World War II, and just one-fifth the pace of the 1990s,” wrote Slate reporter Annie Lowrey.
2. Bush claimed tax relief would create wealth.
“The tax cuts failed to bolster most taxpayers’ earnings, even before the recession hit. Median real wages actually dropped from 2003 to 2007. Household income from business-cycle peak to business-cycle peak declined for the first time since tracking started in 1967,” said Lowrey, who noted that the top 1 percent of the wealthiest Americans saw their incomes skyrocket.
3. Bush claimed tax cuts would foster new opportunities.
“[T]he number of private-sector jobs created by young companies fell during the Bush administration,” found the Slate reporter. “Unfortunately, the tax cuts never translated into robust economic growth, either. Indeed, the aughts saw the worst growth since World War II. From 2001 to 2007, annual GDP growth averaged just 2.4 percent per year, lower than in any other postwar business cycle.”
4. Bush claimed his tax plan would result in a smaller government.
“Again, the answer is no,” wrote Lowrey, who pointed to two wars and “unpaid-for domestic expansions of government, like Medicare Part D.”
5. Bush claimed his plan would stimulate the economy.
“Sort of,” evaluated Lowrey. “Tax cuts give a mild boost to the economy, but not a big one.”
She concluded, “By Bush’s own metrics, then, the tax cuts were a failure.”
Given the unstopping anti-tax drumbeat and the unceasing pro-tax cut chants, remembering the past should protect us from current foolishness. Some ideological witchdoctors promise cures that have proven to be useless.
Addressing realistically the nation’s fiscal woes means tax increases for the wealthiest among us. Corporations must pay taxes, unlike General Electric. Corporate tax subsidies must be adjusted, loopholes must be closed and overseas tax havens must end.
Contrary to some who adamantly reject any tax increases, Sen. Tom Coburn (R-Okla.) understands the need for realism – non-ideological truthfulness to fix real problems.
“Between now and the next year, as we go to solve this problem, everybody knows there’s going to have to be a compromise on some sort of revenue increases,” Coburn said on MSNBC’s “The Last Word.”
“We’re going to fix the country, and some of that is going to be revenue increases, that’s the only way you’re going to build a compromise and get it signed by this president,” said the Oklahoma Republican.
Goodwill people of faith are needed to challenge the myth about tax cuts by recalling Bush’s claims and applauding political leaders like Coburn.
Robert Parham is executive editor of EthicsDaily.com and executive director of its parent organization, the Baptist Center for Ethics.
Editor’s Note: Click here to learn more about EthicsDaily.com’s documentary on faith and taxes, “Sacred Texts, Social Duty.”