Romney's Leaked Fundraiser Video

GeraldoRivera

So why didn't the Bush tax cuts propel us into a highly prosperous economy?

cincychick35

Under Bush revenue to the government did grow by 10%, but spending also grew by 25%. The problem has not always been taxes.  The problem has been runaway spending.

 

Bush?s 2003 tax cuts generated a massive increase in federal tax revenue and were followed by 52 consecutive months of economic growth. From 2004 to 2007, federal tax revenue increased by $780 billion, the largest four-year increase in American history.  Total federal revenue from 2003 to 2007:

2003 -- $1.78 trillion

2004 -- $1.88 trillion

2005 -- $2.15 trillion

2006 -- $2.40 trillion

2007 -- $2.56 trillion

 

However, revenues fell after the ?Dot Com? bubble of 2000 and the tragedy of 9/11 in 2001.  This also accounts for the slower economic growth.

 

The next four years of the Bush Presidency after the 2003 reduction in tax rates saw a 44% increase in Federal tax revenues from $1.782 trillion to $2.568 trillion.  

It?s important to keep in mind that the recession had nothing to do with the tax cuts.  The recession was brought on by destructive federal intervention in the subprime mortgage market, irresponsible funding and securitization of subprime loans by Freddie Mac and Fannie Mae, unsound Federal Reserve monetary policy, a lack of oversight by the Securities and Exchange Commission, greed and fraud committed by certain large banks and investment firms, and consumers who bought homes they really couldn?t afford.  Furthermore, even in 2009, when the recession neared depression territory and remained severe throughout the year, total federal revenue was $2.10 trillion, which, even adjusted for inflation, was very close to total federal revenue for the boom years of 2005 and 2006.

 

Allowing the Bush Tax Cuts to expire will likely wreck a still-fragile economy. According to the Tax Policy Center?s Dan Baneman, letting the Bush tax cuts (including the payroll tax cut) expire would increase taxes on an average American household by $3,000 in 2013 alone. That?s a steep 5 percent cut in after-tax incomes.