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Not All Tax Cuts Are Created Equal
Posted By Conn Carroll On January 22, 2009 @ 3:21 pm In Ongoing Priorities | Comments Disabled
For over a year, the federal government has been trying to stimulate the economy using the same Bush/Obama Borrow and Bailout approach. Specifically policymakers have :
Now congressional leaders want to keep digging by adding another $825 billion in deficit spending and targeted temporary tax cuts . We have no reason to believe Congress’ next, and bigger, round of deficit spending will be any more effective than the first. What’s more, the temporary and narrowly targeted tax cuts in the bill are designed to redistribute wealth, not create it.
There is an alternative: permanent tax reducations such as the ones Congress passed in 2003. Tax cuts like those have a proven track record of encouraging economic growth. Just look at the attached chart tracking five major economic indicators in the six quarters before and after President Bush signed the tax reductions into law. The cuts got results because they were designed to increase market incentives to work, save, and invest, thus creating jobs and increasing economic growth . In the seven quarters that followed, by the way, 5 million jobs were created.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2009/01/22/not-all-tax-cuts-are-created-equal/
URLs in this post:
 Image: http://www.foundry.org/wp-content/uploads/2009/01/2003taxcuts2.jpg
 Specifically policymakers have: http://www.heritage.org/Research/Budget/bg2208.cfm
 another $825 billion in deficit spending and targeted temporary tax cuts: http://www.google.com/hostednews/ap/article/ALeqM5hEx3tiPJhZQLVqjNmHR_oP6FZMuwD95SBC380
 increase market incentives to work, save, and invest, thus creating jobs and increasing economic growth: http://www.heritage.org/Research/Economy/wm1776.cfm
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