June 7, 2011 marks the 10th anniversary of President George W. Bush signing into law the first of several disastrous tax cuts. I wish this day was a celebration of the immense job creation, and booming, shared prosperity that resulted from that legislation, instead of the anniversary that marks increasing joblessness and growing inequality.
Targeted to high-income individuals, the Bush tax cuts were never realistically, expected to provide great economic stimulus. It is well researched and documented that high-income households are less likely than low-and -moderate income households to spend their tax savings. What high-income households are more likely to do, however, is stash away that money in the bank. Tax breaks in the bank do nothing to create economic stimulus.
To demonstrate the ineffectiveness and inequality of the 2001 and 2003 tax giveaways, according to the Tax Policy Center, the top 0.1% of earners (i.e., making over $3 million) received an average tax cut of roughly $520,000, 450 times larger than the average middle-income family.
With an immense amount of time and resources being used to negotiate deficit reduction packages lately (and with spending for vital human needs programs serving as the preferred target) it is useful to remember that the Bush-era tax breaks are one of the biggest drivers of America’s short-term deficit problem. According to the Economic Policy Institute, the Bush era tax breaks added $2.6 trillion to the public debt from 2001 through 2010, accounting for 50% of the total debt accumulated during that time. Those same tax breaks have also cost the American people an additional $400 billion in increased interest payments.
Imagine what that amount of money could do if invested in our young people, our senior citizens, and our crumbling infrastructure. Without the Bush-era tax breaks, 2011 may have been a year in which the American people saw greater equality, rising wages, job training programs, and investment in America’s educational systems. Unfortunately, what the American people are seeing in 2011 is the elimination of funding for programs that support hardworking families and individuals while seeing an increasing amount of benefits directed to the richest individuals and corporations.
Interested in taking action on the legacy of the Bush-era tax breaks? Click here