Effects of the Bush Tax cuts
So How Did the Bush Tax Cuts Work Out for the
David Cay Johnston | Sep. 24, 2010
08:02 PM EDT
Average incomes fell.
Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with
2000, President Bush’s own benchmark year for his promises of prosperity
through tax cuts.
The average annual GDP
(Gross Domestic Product) growth dropped by one-quarter.
- The average annual GDP
(Gross Domestic Product) growth dropped by one-quarterThe tax cuts cost $1.8
trillion in the first eight years, according to an analysis by the Tax Policy
Center, whose reliability the last administration went out of its way to praise
- In the two years since 2008, the cuts’ total cost grew to $2.3
trillion, the Tax Policy Center estimated.
One of every eight dollars of the tax cuts went to
the 1 in 1,000 taxpayers in the top tenth of 1 percent, the annual threshold for
which was in the $2 million range throughout the last administration.
- Now let’s look at wages, the source of most people’s income. In
2008 the average taxpayer made $58,000. That was $5,100 less than in 2007, a
decline of 8.1 percent.
The number of taxpayers
reporting any wages in 2008 was 1.26 million fewer than in 2007,
a scary figure when you consider that most people do not expect to be out of
work for an entire year and that the population grew by more than a percentage
point. In August 42 percent of the unemployed — 6.2 million people — had been
out of work for 27 weeks or more, the Bureau of Labor Statistics said. The
average for all jobless workers was 33.6 weeks of unemployment, the equivalent
of going from New Year’s Day through August 23 without a paycheck.
The number of taxpayers
with incomes below $100,000 with any wage income fell in 2008 by 1.8 million.
Because married couples file many tax returns, this means more than 2 million
people who worked in 2007 earned no wages in 2008.
Those reporting negative
incomes quadrupled from less than 600,000 in 2000 to nearly 2.5 million in
2008. Their losses worsened slightly from -$64,000 on average to -$66,000.
The number of people
reporting incomes of $200,000 or more but legally paying no federal income
taxes skyrocketed in the second Bush term. A decade ago it was fewer than 1,500
taxpayers; in 2000 it was about 2,300. This high-income, tax-free group jumped
to more than 11,000 in 2007 and then doubled in 2008 to more than 22,000.
In 2008 nearly 1 in
every 200 high-income taxpayers paid no federal income tax, up from about 1 in
1,500 in 1998.
The share of high
incomes that were untaxed increased more than sevenfold to one dollar of every
against the promises, what do we find? Overwhelming evidence that the tax cuts
of 2001 and 2003 made us much worse off.