End of an Era: Tax Cuts Losing Steam on Capitol Hill

[Nym90]

It's about time. The vast majority of tax cuts have benefited only a very few while hurting the vast majority of Americans. I don't think it's healthy for the economy to perpetuate and increase this inbalance. Our current budget deficits will be far more harmful in the long run than the tax cuts enacted under Bush have been helpful.

Regarding the line-item veto, I think it gives too much power to the President. There needs to be a balance in power between the branches, and I think this would swing things too heavily toward the executive branch. Regardless of constitutionality, I think it's dangerous to put too much power into the hands of one man; I'd rather have the power of appropriations in the hands of 535 people instead.

[Nym90]

Help!  Help!  I'm rich and I keep getting tax cuts.  Make it stop!    Sorry folks, but I am far from the upper class that the left constantly harps about as receiving the benefits of tax cuts, yet my tax rate has been lower since the first tax cuts went into effect.  The only reason why my tax payments are higher are due to proceeds from stock sales and the jump in housing prices (which the VA tax rate on that has been cut as well).  So . . . I have lower tax rates yet the government is receiving more revenue from an improving tax base.  Seems like the tax cuts work.  Keep them/extend them.

I think the relationship you cite is a bit flawed. Due to inflation, government revenues will continue to increase; they haven't been going up as quickly as they did before the Bush tax cuts did. In addition, the fact that spending hasn't been cut has helped to prevent the economy from going totally down the drain; if you are willing to run a massive deficit, you can keep the economy going strong despite tax cuts, but in the long term the country will suffer for the debt, especially since so much of it is now owed to foreign citizens.

One can make arguments for the tax cuts on other grounds, but the supply side theory that tax cuts bring in more revenue for the government than they cost it has been fairly clearly debunked in my opinion.

It's somewhat akin to arguing that you'll make more money by working fewer hours, since this would give you more opportunity to search for a higher paying job (and not just more money per hour worked, but actually more total money).

Yes, everyone's taxes are lower than they were before Bush, but for the vast majority of people the benefit of those cuts hasn't come anywhere close to balancing out the negative effects.

[Nym90]

The economy has grown by 20% since 2003. Tax cuts are a big part of that, because so much money has been invested in new enterprise or in existing small business.

Dont forget the fact that the fed went on interest rate slashing spree post 9/11.  With interest rates at .5% its pretty hard for the economy not to grow.

Aha, but it was not accompanied by significant inflation. If keeping rates low came with no side effects, they would always be low.

It's curious, in general, that Clinton was praised for presiding over a good economy but, now that Bush is doing to same, he receives minimal credit. I think Presidents are overrated in terms of their influence on the economy, but what's good for the goose...

I would argue that the growth rate of the economy as a whole is not the only factor to consider when evaluating a President's economic performance. Clinton was able to achieve strong growth while running a large surplus, while Bush has required a massive deficit, not to mention the fact that the growth under Bush has much more disproportionately benefited fewer people.

I agree that the President's effect on the economy is overrated, yes. Much like the coach of a football team or pretty much anyone else in a leadership position, they don't have as much influence as people would imagine, and thus tend to get too much praise for their successes and too much blame for their failures. However, they still have more influence than any other single individual. Part of the job of anyone in a leadership role is to persuade people below them to become more productive; a big part of the President's job in managing the economy is in inspiring consumer and business confidence even if the numbers don't always agree with the optimistic picture.