There has been many criticisms of the "Bush tax cuts".

The numbers are pretty much in for FY 2005 and here's the results:

CBO's Baseline Budget Projections

Tax receipts from individual returns in 2004 were $809 billion.
Corporate income tax 2004 was $189 billion.

This year, individual income tax receipts were $927 billion. (up 14.5%)
This year, corporate tax receipts were $269 billion. (up 42%)

Despite increased spending this year, the deficit is lower in 2005 than it was in 2004 ($331 billion versus $412 billion).

The government actually collected more of a percentage of GDP this year than it did in 2004 (17.5% of GDP in 2005 versus 16.3% in 2004).

So what's going on here?

Questions for Debate:

Have the Bush Tax Cuts decreased revenues to the federal government?

Have the Bush Tax Cuts favored business?

Should we repeal the Bush tax cuts or make them permanent?

Have the Bush Tax Cuts decreased revenues to the federal government?

Initially it did, but tax cuts is the long term solution and the government is now reaping the benefits. Tax hikes during economic downturns is forcing the people to bail out the government at the same time that the people weather the recession.

Have the Bush Tax Cuts favored business?

Yes and no. Last I looked, jobs come from businesses. And when you consider that 70% the U.S. workforce is in small businesses, it makes sense. What you don't hear is how the tax limits on FICA (Social Security) and Medicare have nearly doubled under the Bush Administration. Income tax went down, but FICA and Medicare went up, affecting mostly corporations and the wealthy.

Should we repeal the Bush tax cuts or make them permanent?

To be honest, I believe in small government. Even with these tax cuts we still have a government that continues to bloat. So my obvious answer is to make them permanent.

Going on here? Isn't this a reflection of a government using the same tax system (am I wrong here?) and collecting more money during the stronger economic year and in the latter year in an inflationary economy. (Not an economic criticism, we inflate instead of deflate so the raw $ figure should be higher in a latter period all things being constant. I think the percent of GDP reflects a bigger haul in a stronger economy.

Have the Bush Tax Cuts decreased revenues to the federal government?

I think that we do not have enough information to answer this. Shouldn't our baseline be the years prior to the first Bush cuts being implemented? In the sense of absolute dollars we have proof that more revenues will have been collected for 2005 than had under 2004. Isn't this missing a non-Bush tax cut year?

Have the Bush Tax Cuts favored business?

I am not sure. I think they have favored those with higher income over those with lower income and that they have favored those that gain income from capital over labor-work however you would like to define going to work.

Have the Bush Tax Cuts decreased revenues to the federal government?
In all fairness, in 2000 - individual income tax receipts were $1004.5 billion and $994 billion in 2001 from CBO. So initially, yes they did.

The fact that the cuts encouraged some economic growth has led to increased revenues almost to the levels that were obtained in 2000.

Should we repeal the Bush tax cuts or make them permanent?

We should balance the budget immediately.

Care to hazard a guess how a lower tax rate would lead to a higher percentage of GDP being collected if the simple formula of

(GDP) x (averaged tax rate) = (tax receipts)

holds true?

According to the CBO table, the GDP grew by 6.2%. Tax receipts grew by over 14% from individuals and 42% from businesses.



Do you have any data to support this?



Bush's tax cuts went into effect in FY 2002 and increased in FY 2003. FY2001 was on Clinton's watch (or at least his policies). Economic growth was very anemic (or negative) for much of 2001 and 2002.



Is that a vote for repealing or a vote for making them permanent?

First let me say, good point on the timing of the cuts. The economy was in the dumps and plenty of people had right offs for stock losses back then.

As for the repeal vs keeping of tax cuts. I like small government, but I like responsible government more. Ideally, balance the budget and keep the cuts. If you have to compromise and lose a few of the less economically stimulating cuts short term, so be it. I was never a big fan of the idea of getting taxed at a lower rate for investing money than earning money anyway. That is a vote for balancing the budget first and foremost.