(Representative Todd Akin of St Louis talks about 2003 Bush Tax Cut and Obama’s recent tax compromise)
HALT: Halting Arkansas Liberals with Truth
This morning when I got up the news was reporting that “A massive bipartisan tax package preventing a big New Year’s Day tax hike for millions of Americans is on its way to President Barack Obama for his signature.” Evidently, in order to get some things that the Democrats wanted, they had to allow the Republicans to keep the rates down on the top tax bracket. I think that is good, but many liberals have a real problem with that, and many will contend that lowering the top rate in the past has never helped.
In his article “Tax work, not wealth,” ( Nov 25, Arkansas Times), Ernest Dumas asserts, “…the Bush tax cuts, which were to send the economy soaring and set off the greatest hiring rush in history. We know what happened. But what about specifically the capital gains cut of 2003, which was packaged with accelerated personal and corporate tax cuts and lowered the top capital gains rate to 15 percent? The economy continued to grow at a snail’s pace and then fell off the cliff.”
NOTICE TO LIBERALS: The facts show that the economy responded strongly to the 2003 tax cuts.
Like my last post, I am responding to these liberal assertions with a portion from an article published January 29, 2007 called, “Ten Myths About the Bush Tax Cuts” by Brian Riedl. Riedl is the Grover Hermann Fellow in Federal Budgetary Affairs at the Heritage Foundation and Riedl’s budget research has been featured in front-page stories and editorials in The New York Times, The Wall Street Journal, The Washington Post and The Los Angeles Times.
Myth #9: The Bush tax cuts have not helped the economy. Fact: The economy responded strongly to the 2003 tax cuts.
The 2003 tax cuts lowered income, capital gains, and dividend tax rates. These policies were designed to increase market incentives to work, save, and invest, thus creating jobs and increasing economic growth. An analysis of the six quarters before and after the 2003 tax cuts (a short enough time frame to exclude the 2001 recession) shows that this is exactly what happened:
GDP grew at an annual rate of just 1.7 percent in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1 percent.
Non-residential fixed investment declined for 13 consecutive quarters before the 2003 tax cuts. Since then, it has expanded for 13 consecutive quarters.
The S&P 500 dropped 18 percent in the six quarters before the 2003 tax cuts but increased by 32 percent over the next six quarters. Dividend payouts increased as well.
The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.
The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.
Critics contend that the economy was already recovering and that this strong expansion would have occurred even without the tax cuts. While some growth was naturally occurring, critics do not explain why such a sudden and dramatic turnaround began at the exact moment that these pro-growth policies were enacted. They do not explain why business investment, the stock market, and job numbers suddenly turned around in spring 2003. It is no coincidence that the expansion was powered by strong investment growth, exactly as the tax cuts intended.
The 2003 tax cuts succeeded because of the supply-side policies that critics most oppose: cuts in marginal income tax rates and tax cuts on capital gains and dividends. The 2001 tax cuts that were based more on demand-side tax rebates and redistribution did not significantly increase economic growth.
The thing that Liberals forget is that the Founding Fathers would have rebelled against this size of government. In fact, the government was set up to just cover some basic things and the liberals really do think that the government should now control practically every part of our lives. Lower taxes forces the liberals to lower spending. That is why they love taxes so much.
The Daily Hatch 
Comments
Good work, Everette. My general rule of thumb is that cutting taxes is ALWAYS a good idea.
The thing that Liberals forget is that the Founding Fathers would have rebelled against this size of government. In fact, the government was set up to just cover some basic things and the liberals really do think that the government should now control practically every part of our lives. Lower taxes forces the liberals to lower spending. That is why they love taxes so much.