Tax Cuts Don't Help Government, Economy
by Matt Lewis, 8/14/2006
Let's add the Congressional Research Service to the list of government agencies that have demonstrated that the Bush tax cuts come nowhere near to paying for themselves.
Even more damaging, though, is the finding that the tax cuts barely grow the economy in the long-run. From Congress Daily (subscription required):
The Treasury report was based on "dynamic" analysis, which looks at how changes in tax law affect taxpayers' behavior in ways that influence economic growth. The report found that if made permanent, Bush's tax cuts would cause economic output to grow by 0.7 percent in the "long run" -- an unspecified period beyond 2016. But that economic growth would have to be paid for by cuts in government spending, the report says.
To be clear, that's a total of 0.7 percent growth over a long number of years, not annually. That's barely perceptible, according to Jason Furman of the Center on Budget and Policy Priorities. So why we should ever renew these tax cuts?
