Why haven't the Bush tax cuts worked so far? And why would they work now?
Think about it. The tax cuts have been in place for how many years now and we still had a melt down of the economy, so the big scare that if they expire things will get worse are unfounded. The unemployment problem has much deeper roots and is more multi faceted than the GOP's line on tax cuts being the big answer. They have used this theory since the 80's and the federal deficit has increased right along with it.
- Anonymous1 decade agoFavorite Answer
The Bush tax cuts never made an sense to me. I understand that when Clinton was in office we were taking in a little more than we were spending but that could have been used to pay the deficit. The Bush came along and wanted everyones approval so he pushed for a tax cut. Everybody likes tax cuts. But then he started a war and continued to ask for tax cuts then he started another war and he gets his tax cuts. Why he didn't drop the tax cuts until we were no longer at war is a mystery to me. If the economy was stronger and we didn't have such a deficit we wouldn't be where we are today.
Now the GOP wants to keep the tax cuts including the very rich. I wish Obama would tell the GOP to go screw themselves and allow the tax cuts to expire. Then maybe we could then start paying off our huge debt.
- 5 years ago
Yes, the tax breaks are not working and, if it hasn't worked in ten years, it will never work. When will the middle class get their tax breaks? I am not an economist but my common sense tells me since the jobs went overseas and the usa isn't producing anything to sell we are simply making China wealthy and the USA more poor. Who ever had that bright idea should be made to walk the plank. I don't understand why the tea congress and Ryan want to force their terrible budget proposal down the throats of the American people, who clearly do not want it. That tells me the voters don't seem to matter as much to them as big business money does. They must be planning to grab up the cash and retire early. The GOP cut their own throats with Ryan and the Tea congress bad behavior for the 2012 election.
- 1 decade ago
The housing bubble burst, as did the internet bubble. We had too many bubbles popping too close together, and no new bubbles coming up to really take their spots.
Add to it jobs going overseas, paying people in the US not to work (unemployment, welfare for single moms).
We gave out tons of credit for people to spend spend spend, then we took it away, dramatically decreasing spending. How can you spend money like you did before, when the money you were spending was all from your Mastercard or bank loan? You can't. So you don't buy things, and the people who made the things are no longer needed.
Our country's economy was based on credit. When it went so did the economy. But it had to happen. The truth is the economy cannot grow forever. At some point it will have to stabilize, and we are not set up to handle this.
- 1 decade ago
They DID. When they started, we TOLD you guys a recession would happen as their end neared and even sooner if you made-clear you would not extend them. Literally 100% of economic indicators went to record or near record highs and ALL were still trending UP until after we voted to "change" Congress and you guys ANNOUNCED you would not consider extending the rates.
Deficits are due to SPENDING. This is so easily proved as to be just ridiculous. EVERY tax-cut "since the 80's" has been followed by a large INCREASE in revenue. I know this is impossible for any Democrat to grasp (unless they're all just LYING) but bringing MORE MONEY IN does NOT make the deficit worse.
Bottom-line: OUR predictions keep coming true and you guys ALWAYS demand policy based on your claim you think they won't "this time."
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- thegubmintLv 71 decade ago
They did work. The economy was tanking when Bush took office. The tech sector was in the middle of its implosion, the financial sector was undergoing a meltdown, and the energy sector was going through a huge fiasco with the Enron thing and California's stupidity. The Bush tax cuts staved off a huge recession, resulting in a strong recovery that withstood the devastating effect of 9/11 on the worldwide economic markets.
The present day problems are a result of the housing sector problems caused in much part by the requirements laid on the financial institutions to lower the criteria for obtaining mortgages, and the total ineptitude of the Democratic controlled Congress of Pelosi and Reid, who basically watched for two years while the economy nose-dived.
- Uncle PennybagsLv 71 decade ago
Who says they didn't work?
The 2003 tax cuts helped create 7.7 million new jobs from 2003 thru 2007.
What we can say is that the tax cuts were ineffective at preventing a housing bubble, banks making lots of really bad loans, and then the housing bubble bursting, resulting in millions of lost jobs.
But then again, tax cuts or tax hikes really don't have specific effects like that, do they?
- Anonymous1 decade ago
No. YOU think about it. Look at what happened to govt revenues AFTER the tax cuts - to save you time they went from $1.7 Trillion in 2003 to $2.4 Trillion. That's AFTER the tax cuts. In 2007 -also AFTER, remember, the unemployment rate was 4.6%. It is either lying or ignorant to say they dind't work.
- 1 decade ago
The "melt down" of the economy has much more to do with the government's spending than with any tax cuts. The government needs to curb spending...period
- 1 decade ago
Tax cuts did not cause the recession. The government pressed banks to increase lending for decades, and the Liberals refuse to blame any of these idiots. Andrew Cuomo just became governor in NY state and he was the head of HUD while all of that was going on. Does that matter to Liberals?
- PfoLv 71 decade ago
Tax cuts didn't cause the economic crisis. The deficit increases every year, whether taxes are higher or lower, so clearly that doesn't it either.