eridani (41,632 posts)
Report: Bush Tax Cuts Gutted Americans' Incomes 6.6 Trillion Dollars
http://www.dailykos.com/story/2014/07/11/1313326/-Report-Bush-Tax-Cuts-Gutted-Americans-Incomes-6-6-Trillion-Dollars
According to an analysis by Pulitzer-Prize winning reporter David Cay Johnston, formerly of the New York Times, the Bush tax cuts, touted as a harbinger of prosperity by the Republican Party, actually robbed each American taxpayer of $48,000 in pre-tax personal income during the twelve years of their existence, for a total of approximately 6.6 trillion dollars.
This is more than enough to pay for every student loan, car loan, and credit card debt in the U.S, while still leaving 2.4 trillion dollars in the pockets of Americans. It is the equivalent of an extra 11 dollars a day lost to each American taxpayer over the last twelve years.
Johnston analyzed rates of long term average personal incomes as reported by American taxpayers from 2000-2012, adjusting for inflation and population growth. His tables are contained in this article:
In 10 of the 12 years when the Bush tax cuts were in effect, the average income shown on tax returns was lower than in 2000. In the two upside years, average income rose modestly, up $504 for 2006 and $1,744 for 2007.
Total those 12 years and the net shortfall per taxpayer comes to $48,010.
He notes that after twelve years of tax cut mania average real hourly wages are now 6% less than they were in 1972-1973.
Emphasis by the Proglodyte.
Skittles (95,152 posts)
5. remember the bribery checks that bastard sent out?
****ing pathetic how many people fell for that crap
EIC = BRIBERY
EBT spent at strip club = God given right!
LuvNewcastle (6,795 posts)
8. When people fell for that, all I could do was shake my head and say,
"Americans are ****ing stupid." I hated Cash for Clunkers, too. I've always bought used cars and paid cash for them and drove them until they fell apart. Now there aren't that many old, cheap used cars around. I love my scooter, but I'd like to have a car, too, for when it pours down like it is right now. I just get soaked when I have to go to work or when I have an appointment. It's hard to find a car for less than $3000 nowadays.
Spitfire of ATJ (16,023 posts)
23. "Cash For Clunkers" got a lot of SUVs off the road.
Rapillion (14 posts)
10. I don't understand
Average disposable household income, adjusted for inflation, could certainly be less. That also correlates with the years of the Bush tax cuts, which were unnecessary. But that doesn't explain how the tax cuts caused the decline in personal income.
A Simple Game (5,998 posts)
11. It's probably because of all the money hoarded by the 1%. If that money was
in circulation, which it would be if the government had it, it would increase wages and productivity. Money just sitting there does nothing it needs to be in circulation.
Define hoard.
They aren't keeping their money in a mattress. Even if it were in CDs that money is used to capitalize the lending markets.
eridani (41,632 posts)
12. Exactly. What happens in Monopoly when one player gets all the money and wins?
The game ends, obviously. And if you haven't run out of beer and popcorn and want to keep playing, what do you have to do?
And your understanding if economics is just that shallow.
Tax cuts for others doesn't take money out of my pocket any more than tax increases put money into my pocket.
Rapillion (14 posts)
17. But I think that's an aggregate demand issue
I don't think it is a tax cut issue.
I don't understand how there would be an increase in wages and productivity if the US Government had retained the money.
You can argue that the tax cuts simply led to financial speculation causing the bubble that burst in a financial meltdown, pointing out that the average American didn't benefit. But my quibble with Johnston is that he doesn't show how the tax cuts caused the decline in income.
A Simple Game (5,998 posts)
18. But the government wouldn't have retained the money, it would have
spent it and returned it to circulation. The rich are sitting on money, not the government. Borrowing by the government would be lower freeing up money to use on infrastructure instead of interest paid to, yes even more money for the rich to hoard. Even worse the rich are using the money to collect more money in the form of interest and dividends. Much of the money is set overseas in the form of offshore investments that decrease jobs in the US and higher unemployment keeps wages lower.
It is not just one dollar out of circulation, that dollar is passed from business to person to business to government to person to business, etc., etc., etc. Pull that dollar from circulation and just sit on it and the process stops.
1. Rich don't hoard
2. Government spending is cost-only, never profitable
3. Even if your dumb-ass post was true it still doesn't validate the OP
BillZBubb (5,230 posts)
29. The government doesn't retain money.
When the rich get big tax cuts, according to right wing mythology, they invest the money in new enterprises. But, historically, that almost never happens. They might invest the money, but a lot of it goes offshore. Look at romney's financial gymnastics during that period as an example. Very little of his money went to grow American businesses. He was typical.
So, the growth upon which the scheme is based never materializes. But, government still has bills to pay. The loss of revenue leads to two problems, larger deficits and the need to curtail government spending.
That always leads to lower aggregate demand. On the other hand, had the government had those revenues and invested them in areas with a high multiplier like infrastructure, education and even welfare, economic growth would have been higher. Along with that demand would have risen and wages too.
Anyway, Johnston is showing correlation, a correlation that is backed up by other periods of trickle down quackery. Even if he didn't show a direct mechanism, there is clearly a connection. It is a tax cut issue.
Cresent City Kid (1,438 posts)
13. That is a good question
The average voter needs this made clear. In 2008 with the whole economy blowing up at election time, they seemed to understand that the party in power for the previous 8 years was to blame. 2 years later in the midterms, voters seemed to forget all the lessons learned. This would be like the republicans running on Hoover economics in the 1934 midterms and being swept into power.
To your point, it is imperative that we get our heads around cause and effect with the Bush tax cuts in particular and the underlying economic model in general. This model is being sold to the average Joe with an easy to digest, sounds good on paper narrative. I wouldn't care except that average Joe is voting food off of my table or staying home on election day and letting it happen.
In other words: you still can't validate the OP
Orsino (27,578 posts)
20. Tax cuts always depress wages.
Trickle-down is a big con. The Bush tax cuts were squandered opportunity, and along with his wars have helped Congress cry poverty ever since.
Even if true, when have tax increases ever increased wages?
davidcay (8 posts)
25. you would understand if you read my column
All I did was hold Mr. Bush to his own standard -- actually a lesser standard. His standard was that no ifs, ands or buts his tax cuts would make us better off than we were in 2000. My calculations are just for staying at the level of 2000. Please read my column at this bitty link: http://alj.am/1pYQBZt
You may also want to click on my byline to read my June 4 and June 20 columns, which are related.
A columnist as Al Jazeera
dawg (6,895 posts)
19. Sigh.
I hate to be the bad guy here, but this "report" makes no economic sense.
Bush's tax cuts starved the U.S. Treasury. They increased the deficit. They gave politicians cover for their attempts to cut social net programs.
But they did not contribute to the lowering of average Americans' incomes. If anything, they would have been mildly stimulative to the economy; not worth the cost in foregone tax revenue, but mildly stimulative nonetheless.
davidcay (8 posts)
26. yes it does make sense
Last edited Tue Jul 15, 2014, 09:00 PM - Edit history (1)
You should read my column. I just compared the data -- after waiting 14 years for it to become available -- to the oft repeated and unqualified promise of Mr. Bush that his tax cuts would make us better off. I offered campaign opportunity to hedge its bet and they said no ifs, ands or buts, tax cuts will make us more prosperous than in 2000. All I did was hold him to lower standard of staying even. Please read my column at this bitty link -- http://alj.am/1pYQBZt
You will find other columns there (click on my byline) with analysis of data showing how, for example, Americans fared better 1933-36 than 2009-12 and how higher taxes do not mean fewer jobs, etc.
David Cay Johnston
dawg (6,895 posts)
33. Correlation does not equal causation.
blah blah blah
Mr. Jihadonomist doesn't reply.
BillZBubb (5,230 posts)
30. You are WRONG. 100% WRONG
Those kind of tax cuts are not stimulative at all--ie the multiplier is low. That's why trickle down always fails.
What would have been stimulative, and probably what the author assumed, is that those lost revenues, if invested by the government in high multiplier areas would have definitely been stimulative, highly so. The historical data backs this up.
Did you ever get the feeling that terms like "Bush" and "tax cuts" aren't triggers so much as they are security blankets?
These terms help the Proglodytes explain their miserable world in terms they can emotionally accept.
http://www.democraticunderground.com/10025241611
