If tax cuts create revenue, why did the Bush tax cuts result in such a large revenue loss?

The Bush tax cuts have contributed to revenues dropping in 2004 to the lowest level as a share of the economy since 1950, and have been a major contributor to the dramatic shift from large projected budget surpluses to projected deficits as far as the eye can see.

http://www.cbpp.org/cms/index.cfm?fa=view&id=1811

5 Answers

Relevance
  • WallyZ
    Lv 7
    10 years ago
    Favorite Answer

    Tax cuts, especially when they are followed by spending cuts, have never recovered an economy, and have never generated revenue although the republicants will try to site something that "did it". What creates revenue is when the consumers have sufficient income and are happy about the future of the county to want to buy things. Giving rich people tax cuts do nothing if they are worrying if their job is going to still be there.

    History has a perfect example of this. The Great Depression was brought on by republican Herbert Hoover. He passed several tax cuts which made it much worse, pretty much like what Bush had done. Along came FDR and he came up with the New Deal program. He regulated the finance industry, started thousands of Jobs programs and got America back to work. The economy turned around dramatically until FDR listened to the republican complaints who convinced him to stop. He did scale it down and the economy started to turn south again which convinced FDR and practically everyone else that FDR had the right idea. The republican party was almost destroyed by this until the early 1950's. War hero Dwight D Eisenhower, who was rather neutral and could have run for either party was elected as a republican. z

  • 10 years ago

    Yeah, I suppose the deficits don't have much to do with the ridiculous spending.

    You make $50,000 a year. You spend $90,000 a year. The problem clearly lies with not making enough money, right? Couldn't have anything to do with your expenditures?

    I also love Table 2 that shows how "tax cuts" are to blame for deficits. Even when taxes were higher, there was still a freaking deficit, and no one ever seems to blame spending for that.

  • 10 years ago

    I hate teaching math on my day off.

    Taxes increase revenue.

    Spending past the higher revenue leads to loss.

    If I normally charge you $10, but this time charge you $11, I have $11. But if I spend $12 then I'm short a buck.

  • 10 years ago

    Tax cuts result in lost revenue unless tax chaters suddenly decide to pay.

  • How do you think about the answers? You can sign in to vote the answer.
  • Anonymous
    10 years ago

    Oh you got us there. I know, the solution is high taxes and more spending. How did we not see the truth of your corrupt Democrat Party?

Still have questions? Get your answers by asking now.