ClydeR
02-15-2009, 06:51 PM
An awful lot of folks on the internets claim that the tax cuts in the stimulus bill are the biggest in history. Don't let them fool you! When it comes to tax cuts, no one was better than George W. Bush. I sure do miss him. As explained in the following quote, the way these folks conclude that the stimulus tax cuts were bigger than the Bush tax cuts is to compare the stimulus tax cuts, which last two years, to just the first two years of Bush's tax cuts. But most of Bush's tax cuts lasted 10 years, and over that time they were nearly five times larger than the stimulus tax cuts.
Steven Waldman, a former U.S. News editor (well before I wandered these halls), makes an interesting case that the coming tax cut will indeed be the biggest ever.
The compromise stimulus plan includes $282 billion in tax cuts over two years.
According to the Wall Street Journal, Bush's first two years of tax cuts amounted to $174 billion. A second batch in 2004 and 2005 cost $231. And those were thought to be bigger than the tax cuts offered by Reagan, Kennedy, or others.
But wait, you say, wasn't Bush's 2001 tax cut, at $1.35 trillion (funny how the GOP didn't mind draining one trillion dollars from the government coffers then), the largest in history?
Yes, over the full 10 years of its existence. But over the first two years, as Waldman points out above, the price tag was much smaller. So the Obama stimulus tax cut would be the biggest ever for the first two years. Or something like that.
Steve Benen points out over at Political Animal that this means that Republicans will be voting against one of the biggest tax cuts ever. Democrats don't point this out very much, I suspect, because they are so busy arguing that spending will do more than tax cuts to stimulate the economy.
More... (http://www.usnews.com/blogs/robert-schlesinger/2009/02/12/is-obama-stimulus-plan-also-the-biggest-tax-cut-ever.html)
Unfortunately, the tax cuts in the stimulus bill, even though substantial in size, are not likely to stimulate the economy much because they are aimed at low income workers (http://www.opencongress.org/articles/view/795-The-Obama-Tax-Cuts). Tax cuts aimed at high income taxpayers stimulate the economy more because those are the people who create jobs. High income taxpayers create jobs primarily through investment and secondarily by hiring people to drive them and do their housework and gardening and so forth. Poor people will spend their stimulus savings on fast food and prepaid cell phones, not on job-producing investments.
No matter what some people, like the guy I quote below, may say, Republican opposition to the stimulus bill is going to pay off in a big way in the congressional elections in 2010 and in Sarah Palin's election in 2012.
The Republican strategy here is incredibly bold. The party’s betting against Obama’s current popularity and against the chance of an economic recovery by 2010 (or 2012), having done very little work convincing Americans that the stimulus tax rebates amount to “welfare” (one popular argument) or that, after eight years of deficit spending, voters should worry about the cost of this bill. I’m skeptical about the political oomph of attacking “wasteful spending,” even though (in a growing economy, at least) it makes more sense than endless tax cuts. But maybe the strategy will pay off. Or maybe putting 177 Republicans on record against tax cuts will come back to hurt them. We’ll find out.
More... (http://washingtonindependent.com/27931/1993-all-over-again)
Steven Waldman, a former U.S. News editor (well before I wandered these halls), makes an interesting case that the coming tax cut will indeed be the biggest ever.
The compromise stimulus plan includes $282 billion in tax cuts over two years.
According to the Wall Street Journal, Bush's first two years of tax cuts amounted to $174 billion. A second batch in 2004 and 2005 cost $231. And those were thought to be bigger than the tax cuts offered by Reagan, Kennedy, or others.
But wait, you say, wasn't Bush's 2001 tax cut, at $1.35 trillion (funny how the GOP didn't mind draining one trillion dollars from the government coffers then), the largest in history?
Yes, over the full 10 years of its existence. But over the first two years, as Waldman points out above, the price tag was much smaller. So the Obama stimulus tax cut would be the biggest ever for the first two years. Or something like that.
Steve Benen points out over at Political Animal that this means that Republicans will be voting against one of the biggest tax cuts ever. Democrats don't point this out very much, I suspect, because they are so busy arguing that spending will do more than tax cuts to stimulate the economy.
More... (http://www.usnews.com/blogs/robert-schlesinger/2009/02/12/is-obama-stimulus-plan-also-the-biggest-tax-cut-ever.html)
Unfortunately, the tax cuts in the stimulus bill, even though substantial in size, are not likely to stimulate the economy much because they are aimed at low income workers (http://www.opencongress.org/articles/view/795-The-Obama-Tax-Cuts). Tax cuts aimed at high income taxpayers stimulate the economy more because those are the people who create jobs. High income taxpayers create jobs primarily through investment and secondarily by hiring people to drive them and do their housework and gardening and so forth. Poor people will spend their stimulus savings on fast food and prepaid cell phones, not on job-producing investments.
No matter what some people, like the guy I quote below, may say, Republican opposition to the stimulus bill is going to pay off in a big way in the congressional elections in 2010 and in Sarah Palin's election in 2012.
The Republican strategy here is incredibly bold. The party’s betting against Obama’s current popularity and against the chance of an economic recovery by 2010 (or 2012), having done very little work convincing Americans that the stimulus tax rebates amount to “welfare” (one popular argument) or that, after eight years of deficit spending, voters should worry about the cost of this bill. I’m skeptical about the political oomph of attacking “wasteful spending,” even though (in a growing economy, at least) it makes more sense than endless tax cuts. But maybe the strategy will pay off. Or maybe putting 177 Republicans on record against tax cuts will come back to hurt them. We’ll find out.
More... (http://washingtonindependent.com/27931/1993-all-over-again)