Question
Federal Government > Tax > Bush Tax Cuts
Make Bush's tax cuts permanent
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Background
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (""JGTRRA"", Pub.L. 108-27, 117 Stat. 752), was passed by the United States Congress on May 23, 2003 and signed by President Bush on May 28, 2003.
Among other provisions, the act accelerated certain tax changes passed in the Economic Growth and Tax Relief Reconciliation Act of 2001, increased the exemption amount for the individual Alternative Minimum Tax, and lowered taxes of income from dividends and capital gains.
There was considerable controversy over who benefited from the tax cuts. Bush's supporters and proponents of lower taxes claimed that the tax cuts increased the pace of economic recovery and job creation. His opponents, for their part, charged that the cuts favored the wealthy and special interests. Supporters argued that the economy was already slowing down when Bush took office and that little of the economic downturn of 2002 was due to Bush's agendas when considering lag time in the effects of policy changes on the economy. Critics argued that the tax cuts disproportionately benefited the wealthy, although this was also controversial. The tax code remained progressive, although slightly less so, on a rate basis. Income became differentiated into greater categories (such as for ""qualified"" dividends compared to other dividends, and different types of capital gains), which increased complexity in the tax code.
The Congressional Budget Office estimated that the tax cuts would increase budget deficits by $60 billion in 2003 and by $340 billion by 2008. Supporters of the president argue that this analysis ignores the potential growth that the act could encourage. Supporters also argue that this would be further supported by analyzing the effect of the economic shock of the terrorist events of September 11, 2001. The terrorist fears, resulting reduction in travel and consumer expenditure, and increased security expenditures, they say, are a prime example of an economic cost shock, and they suggest that the recession of 2001 and 2002 would have been drastically worse had no attempts at promoting economic growth by reducing taxes been made, though there is no empirical evidence to support this claim (nor could there be). The lag between policy making and economic impact suggests the possibility to be remote.
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Among other provisions, the act accelerated certain tax changes passed in the Economic Growth and Tax Relief Reconciliation Act of 2001, increased the exemption amount for the individual Alternative Minimum Tax, and lowered taxes of income from dividends and capital gains.
There was considerable controversy over who benefited from the tax cuts. Bush's supporters and proponents of lower taxes claimed that the tax cuts increased the pace of economic recovery and job creation. His opponents, for their part, charged that the cuts favored the wealthy and special interests. Supporters argued that the economy was already slowing down when Bush took office and that little of the economic downturn of 2002 was due to Bush's agendas when considering lag time in the effects of policy changes on the economy. Critics argued that the tax cuts disproportionately benefited the wealthy, although this was also controversial. The tax code remained progressive, although slightly less so, on a rate basis. Income became differentiated into greater categories (such as for ""qualified"" dividends compared to other dividends, and different types of capital gains), which increased complexity in the tax code.
The Congressional Budget Office estimated that the tax cuts would increase budget deficits by $60 billion in 2003 and by $340 billion by 2008. Supporters of the president argue that this analysis ignores the potential growth that the act could encourage. Supporters also argue that this would be further supported by analyzing the effect of the economic shock of the terrorist events of September 11, 2001. The terrorist fears, resulting reduction in travel and consumer expenditure, and increased security expenditures, they say, are a prime example of an economic cost shock, and they suggest that the recession of 2001 and 2002 would have been drastically worse had no attempts at promoting economic growth by reducing taxes been made, though there is no empirical evidence to support this claim (nor could there be). The lag between policy making and economic impact suggests the possibility to be remote.
see more on Wikipedia
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