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Ten years later, the Bush tax cuts remain unfair, ineffective, and expensive
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Jun 12, 2011 05:45am |
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| Category | Commentary |
| News Date | Monday, June 6, 2011 11:00:00 AM UTC0:0 |
| Description | Andrew Fieldhouse
June 6, 2011
The Economic Growth and Tax Relief Reconciliation Act of 2001 (the first of a series of Bush-era tax changes) was enacted on June 7, 2001. Ten years later, the Bush tax cuts have exacerbated trends of widening income inequality, accompanied the weakest economic expansion since World War II, and turned budget surpluses into deficits. As detailed in a new Economic Policy Institute policy memorandum, these tax cuts were heavily targeted toward the wealthy at the expense of middle class families, poorly designed as an economic stimulus, and costly—significantly more so than advertised.
Over the past 30 years, middle-class wages have stagnated despite robust productivity growth, while the wealthiest sliver of the population has captured greater shares of income growth and national wealth. Tax policy should be designed to promote economic fairness by pushing against the trend of ever-widening income inequality. Instead, the Bush-era (2001–08) tax changes actually increased inequality by delivering more than half of their benefits in 2010 to the top 10 percent of earners, who make over $170,000 a year. In fact, 38 percent of the dollar benefits went to the top 1 percent of earners (tax filers making over $645,000), who received tax breaks averaging over $100,000.
Working families, however, got the scraps. The bottom 60 percent of earners (making under $70,000 a year) received less than 20 percent of the benefits of these tax changes in 2010. And the tax cuts for the wealthy never trickled down to middle-class families: Inflation-adjusted median weekly earnings fell by 2.3 percent during the economic expansion from 2001Q4 to 2007Q4. While real wages fell for most Americans, the top 1 percent of earners captured a whopping 65 percent of all income gains, leaving just 13 percent for the bottom 90 percent.
These tax changes were no better for the overall economy than they were for middle-class paychecks. Between the end of th |
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