Bush tax cuts
Encyclopedia
The Bush tax cuts refers to changes to the United States tax code passed during the presidency of George W. Bush and extended during the presidency of Barack Obama
that generally lowered tax rates and revised the code specifying taxation in the United States
. These were the:
While each act has its own legislative history and effect on the tax code, the JGTRRA amplified and accelerated aspects of the EGTRRA. Moreover, since 2003 the two acts have often been spoken of together, especially in terms of analyzing their effect on the U.S. economy and population and in discussing their political ramifications.
The Bush tax cuts had sunset provisions that made them expire at the end of 2010, since otherwise they would fall under the Byrd Rule
. Whether to renew the lowered rates and how became the subject of extended political debate, which was resolved during the presidency of Barack Obama
by a two-year extension that was part of a larger tax and economic package, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
.
and the 2003 act
significantly lowered the marginal tax rates for nearly all U.S. taxpayers. One byproduct of this tax rate reduction was that it brought to prominence a previously lesser known provision of the U.S. Internal Revenue Code
, the Alternative Minimum Tax
(AMT). The AMT was originally designed as a way of making sure that wealthy taxpayers could not take advantage of "too many" tax incentives and reduce their tax obligation by too much. It is a parallel system of calculating a taxpayer's tax liability that eliminates many deductions. However the applicable AMT rates were not adjusted to match the lowered rates of the 2001 and 2003 acts, causing many more people to face higher taxes. This reduced the benefit of the two acts for many upper-middle income earners, particularly those with deductions for state and local income taxes, dependents, and property taxes.
The AMT exemption level aspects of the 2001 and 2003 tax cuts, as well as the sunsetting year of capital gains and dividends, were among the tweaks made to the tax code in the Tax Increase Prevention and Reconciliation Act of 2005
.
The Heritage Foundation
alleges that the Bush tax cuts led to the rich shouldering more of the income tax burden and the poor shouldering less; while the Center on Budget and Policy Priorities
(CBPP) has shown that the tax cuts have conferred the "largest benefits, by far on the highest income households." The underlying policy has been criticized by Democratic Party congressional opponents for giving tax cuts to the rich with capital gains tax breaks while acknowledging some benefit extended to middle and lower income brackets as well.
Suggestion or speculation by Bush, Vice President Dick Cheney
, and Senate Majority Leader Bill Frist
that these tax cuts effectively "paid for themselves" has been met with refutations to the contrary from the CBPP, the U.S. Treasury Department and the CBO. Economist Paul Krugman
wrote in 2007: "Supply side doctrine, which claimed without evidence that tax cuts would pay for themselves, never got any traction in the world of professional economic research, even among conservatives." Since 2001, federal income tax revenues have remained below the 30-year average of 8.4% of GDP with the exception of 2007, and did not regain their 2000 dollar peak until 2006 (see chart at right).
Some policy analysts and non-profit groups such as OMBWatch, Center on Budget and Policy Priorities
, and the Tax Policy Center
have attributed much of the rise in income inequality to the Bush administration's tax policy. In February 2007, President Bush addressed the rise of inequality for the first time, saying "The reason is clear: We have an economy that increasingly rewards education and skills because of that education."
Critics state that the tax cuts, including those given to middle and lower income households, failed to spur growth. The cuts also increased the budget deficit, shifted the tax burden from the rich to the middle and working classes, and further increased already high levels of income inequality. Economists Peter Orszag
and William Gale described the Bush tax cuts as reverse government redistribution of wealth, "[shifting] the burden of taxation away from upper-income, capital-owning households and toward the wage-earning households of the lower and middle classes."
Economist Simon Johnson
wrote in 2010: "The U.S. government doesn’t take in much tax revenue—at least 10 percentage points of GDP less than comparable developed economies—and it also doesn’t spend much except on the military, Social Security and Medicare. Other parts of government spending can be frozen or even slashed, but it just won’t make that much difference. That means older Americans are going to get squeezed, while our ability to defend ourselves goes into decline. Just because there’s a bipartisan consensus on an idea, such as tax cuts, doesn’t mean it makes sense. Today’s tax cutters have set us up for tomorrow’s fiscal crisis and real damage to U.S. national security."
In August 2010, the Congressional Budget Office
(CBO) estimated that extending the tax cuts for the 2011-2020 time period would add $3.3 trillion to the national debt, comprising $2.65 trillion in foregone tax revenue plus another $0.66 trillion for interest and debt service costs.
The non-partisan Pew Charitable Trusts estimated in May 2010 that extending some or all of the tax cuts would have the following impact under these scenarios:
The non-partisan Congressional Research Service
has estimated the 10-year revenue loss from extending the 2001 and 2003 tax cuts beyond 2010 at $2.9 trillion, with an additional $606 billion in debt service costs (interest), for a combined total of $3.5 trillion.
In late July 2010, analysts at Deutsche Bank
said letting the Bush tax cuts for those earning more than $250,000 expire would greatly slow economic recovery. However, Treasury Secretary Timothy Geithner said allowing the expiration would not cause such a slowing. The Obama administration proposed keeping tax cuts for couples making less than $250,000 per year. Economist Mark Zandi
predicted that making the Bush tax cuts permanent would be the second least stimulative of several policies considered. Making the tax cuts permanent would have a multiplier effect of 0.29 (compared to the highest multiplier of 1.73 for food stamps).
At the "Slurpee Summit
" of November 30, President Barack Obama
appointed Treasury Secretary Tim Geithner and Office of Management and Budget chief Jack Lew to help Republicans and Democrats hammer out an agreement on extending the Bush tax cuts. All 42 Republican Senators pledged to block all legislation in the lame-duck session until the tax matter was settled.
Congressional Democrats offered two attempts to extend the Bush-era rates for "middle income" families but restore the previous, higher rates for "high income" people. The first proposal had a cutoff at $250,000, while the second raised the dividing line to $1 million. Both proposals were able to pass in the House, but on December 4, 2010, both fell short in the Senate, getting only 53 votes and not the 60 needed for cloture.
On December 6, 2010, President Barack Obama
announced a compromise tax package proposal had been reached, centered around a temporary, two-year extension of the Bush tax cuts. In particular, the framework included key points such as:
Obama said, "I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession. ... So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do. ... As for now, I believe this bipartisan plan is the right thing to do. It’s the right thing to do for jobs. It’s the right thing to do for the middle class. It is the right thing to do for business. And it’s the right thing to do for our economy. It offers us an opportunity that we need to seize."
Administration officials like Vice President Joe Biden
then worked to convince wary Democratic members of Congress to accept the plan, notwithstanding a continuation of lower rates for the highest-income taxpayers. The compromise proved popular in public opinion polls, and allowed Obama to portray himself as a consensus-builder not beholden to the liberal wing of his party. The bill was opposed by some of the most conservative members of the Republican Party as well as by talk radio hosts such as Rush Limbaugh
and some groups in the Tea Party movement
. It was also opposed by several leading potential candidates for the Republican nomination in the 2012 presidential election
, including Sarah Palin
and Mitt Romney
, typically on the grounds that it did not make the Bush tax cuts permanent and that it would overall increase the national deficit.
In an interview during these debates, former President Bush said, "I wish they would have called it something other than the 'Bush tax cuts'. There'd probably be less angst amongst some to pass it." He argued strongly for maintaining the rates: "I do believe it's very important to send the signal to our entrepreneurs and our families that the government trusts them to spend their own money. And I happen to believe lower taxes is what stimulates economic growth and what we need now in our country is economic growth."
On December 15, 2010, the Senate passed the compromise package with an 81–19 vote, with large majorities of both Democrats and Republicans supporting it. Near midnight on December 16, the House passed the measure on a vote of 277–148, with only a modest majority of Democrats but a large majority of Republicans voting for the package. Before that, an amendment put forward by Democratic Representative Earl Pomeroy
and the progressives among the Democratic caucus to raise the estate tax – the ultimate sticking point of the deal for them and the cause of a minor revolt among those against it – failed on a 194–233 vote. The Washington Post
called the approved deal "the most significant tax bill in nearly a decade". President Barack Obama
signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
, on December 17, 2010.
Presidency of Barack Obama
The Presidency of Barack Obama began at noon EST on January 20, 2009 when he became the 44th President of the United States. Obama was a United States Senator from Illinois at the time of his victory over Arizona Senator John McCain in the 2008 presidential election...
that generally lowered tax rates and revised the code specifying taxation in the United States
Taxation in the United States
The United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
. These were the:
- Economic Growth and Tax Relief Reconciliation Act of 2001Economic Growth and Tax Relief Reconciliation Act of 2001The Economic Growth and Tax Relief Reconciliation Act of 2001 , was a sweeping piece of tax legislation in the United States by President George W. Bush...
(EGTRRA) - Jobs and Growth Tax Relief Reconciliation Act of 2003Jobs and Growth Tax Relief Reconciliation Act of 2003The Jobs and Growth Tax Relief Reconciliation Act of 2003 , was passed by the United States Congress on May 23, 2003 and signed into law by President George W. Bush on May 28, 2003...
(JGTRRA)
While each act has its own legislative history and effect on the tax code, the JGTRRA amplified and accelerated aspects of the EGTRRA. Moreover, since 2003 the two acts have often been spoken of together, especially in terms of analyzing their effect on the U.S. economy and population and in discussing their political ramifications.
The Bush tax cuts had sunset provisions that made them expire at the end of 2010, since otherwise they would fall under the Byrd Rule
Byrd Rule
The Byrd Rule is a Senate rule that amends the Congressional Budget Act of 1974 to allow Senators, during the Reconciliation Process, to block a piece of legislation if it purports significantly to increase the federal deficit beyond a ten-year term or is otherwise an "extraneous matter" as set...
. Whether to renew the lowered rates and how became the subject of extended political debate, which was resolved during the presidency of Barack Obama
Presidency of Barack Obama
The Presidency of Barack Obama began at noon EST on January 20, 2009 when he became the 44th President of the United States. Obama was a United States Senator from Illinois at the time of his victory over Arizona Senator John McCain in the 2008 presidential election...
by a two-year extension that was part of a larger tax and economic package, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 , was passed by the United States Congress on December 16, 2010 and signed into law by President Barack Obama on December 17, 2010....
.
Implications for the Alternative Minimum Tax
The 2001 actEconomic Growth and Tax Relief Reconciliation Act of 2001
The Economic Growth and Tax Relief Reconciliation Act of 2001 , was a sweeping piece of tax legislation in the United States by President George W. Bush...
and the 2003 act
Jobs and Growth Tax Relief Reconciliation Act of 2003
The Jobs and Growth Tax Relief Reconciliation Act of 2003 , was passed by the United States Congress on May 23, 2003 and signed into law by President George W. Bush on May 28, 2003...
significantly lowered the marginal tax rates for nearly all U.S. taxpayers. One byproduct of this tax rate reduction was that it brought to prominence a previously lesser known provision of the U.S. Internal Revenue Code
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
, the Alternative Minimum Tax
Alternative Minimum Tax
The Alternative Minimum Tax is an income tax imposed by the United States federal government on individuals, corporations, estates, and trusts. AMT is imposed at a nearly flat rate on an adjusted amount of taxable income above a certain threshold . This exemption is substantially higher than the...
(AMT). The AMT was originally designed as a way of making sure that wealthy taxpayers could not take advantage of "too many" tax incentives and reduce their tax obligation by too much. It is a parallel system of calculating a taxpayer's tax liability that eliminates many deductions. However the applicable AMT rates were not adjusted to match the lowered rates of the 2001 and 2003 acts, causing many more people to face higher taxes. This reduced the benefit of the two acts for many upper-middle income earners, particularly those with deductions for state and local income taxes, dependents, and property taxes.
The AMT exemption level aspects of the 2001 and 2003 tax cuts, as well as the sunsetting year of capital gains and dividends, were among the tweaks made to the tax code in the Tax Increase Prevention and Reconciliation Act of 2005
Tax Increase Prevention and Reconciliation Act of 2005
The Tax Increase Prevention and Reconciliation Act of 2005 was enacted on May 17, 2006.This bill prevents several tax provisions from sunseting in the near future. The two most notable pieces of the bill are the extension of the reduced tax rates on capital gains and dividends and extension of the...
.
Debate over effect of cuts
There was and is considerable controversy over who benefited from the tax cuts and whether or not they have been effective in spurring sufficient growth. Supporters of the proposal and proponents of lower taxes claimed that the tax cuts increased the pace of economic recovery and job creation. Further, proponents of the cuts asserted that lowering taxes on all citizens, including the rich, would benefit all and would actually increase receipts from the wealthiest Americans as their tax rates would decline without resort to tax shelters. The Wall Street Journal editorial page states that taxes paid by millionaire households more than doubled from $136 billion in 2003 to $274 billion in 2006 because of the JGTRRA.The Heritage Foundation
The Heritage Foundation
The Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
alleges that the Bush tax cuts led to the rich shouldering more of the income tax burden and the poor shouldering less; while the Center on Budget and Policy Priorities
Center on Budget and Policy Priorities
The Center on Budget and Policy Priorities is a non-profit think tank that describes itself as a "policy organization ... working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals."The Center examines the short- and...
(CBPP) has shown that the tax cuts have conferred the "largest benefits, by far on the highest income households." The underlying policy has been criticized by Democratic Party congressional opponents for giving tax cuts to the rich with capital gains tax breaks while acknowledging some benefit extended to middle and lower income brackets as well.
Suggestion or speculation by Bush, Vice President Dick Cheney
Dick Cheney
Richard Bruce "Dick" Cheney served as the 46th Vice President of the United States , under George W. Bush....
, and Senate Majority Leader Bill Frist
Bill Frist
William Harrison "Bill" Frist, Sr. is an American physician, businessman, and politician. He began his career as an heir and major stockholder to the for-profit hospital chain of Hospital Corporation of America. Frist later served two terms as a Republican United States Senator representing...
that these tax cuts effectively "paid for themselves" has been met with refutations to the contrary from the CBPP, the U.S. Treasury Department and the CBO. Economist Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
wrote in 2007: "Supply side doctrine, which claimed without evidence that tax cuts would pay for themselves, never got any traction in the world of professional economic research, even among conservatives." Since 2001, federal income tax revenues have remained below the 30-year average of 8.4% of GDP with the exception of 2007, and did not regain their 2000 dollar peak until 2006 (see chart at right).
Some policy analysts and non-profit groups such as OMBWatch, Center on Budget and Policy Priorities
Center on Budget and Policy Priorities
The Center on Budget and Policy Priorities is a non-profit think tank that describes itself as a "policy organization ... working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals."The Center examines the short- and...
, and the Tax Policy Center
Tax Policy Center
The Tax Policy Center is a non-partisan joint venture of the Urban Institute and the Brookings Institution. Based in Washington D.C., it aims to provide independent analyses of current and longer-term tax issues and to communicate its analyses to the public and to policymakers in a timely and...
have attributed much of the rise in income inequality to the Bush administration's tax policy. In February 2007, President Bush addressed the rise of inequality for the first time, saying "The reason is clear: We have an economy that increasingly rewards education and skills because of that education."
Critics state that the tax cuts, including those given to middle and lower income households, failed to spur growth. The cuts also increased the budget deficit, shifted the tax burden from the rich to the middle and working classes, and further increased already high levels of income inequality. Economists Peter Orszag
Peter Ország
Peter Ország is a Slovak ice hockey referee, who referees in the Slovak Extraliga.-Career:He has officiated many international tournaments including the Winter Olympics. He has been named Slovak referee of the year....
and William Gale described the Bush tax cuts as reverse government redistribution of wealth, "[shifting] the burden of taxation away from upper-income, capital-owning households and toward the wage-earning households of the lower and middle classes."
Economist Simon Johnson
Simon Johnson (economist)
Simon Johnson is a British American economist. He is the 'Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He has held a wide variety of academic and policy-related positions, including...
wrote in 2010: "The U.S. government doesn’t take in much tax revenue—at least 10 percentage points of GDP less than comparable developed economies—and it also doesn’t spend much except on the military, Social Security and Medicare. Other parts of government spending can be frozen or even slashed, but it just won’t make that much difference. That means older Americans are going to get squeezed, while our ability to defend ourselves goes into decline. Just because there’s a bipartisan consensus on an idea, such as tax cuts, doesn’t mean it makes sense. Today’s tax cutters have set us up for tomorrow’s fiscal crisis and real damage to U.S. national security."
Debate over continuation of cuts
Most of the tax cuts were scheduled to expire December 31, 2010. Debate over what to do regarding the expiration became a regular issue in the 2004 and 2008 U.S. presidential elections, with Republican candidates generally wanting the cut rates made permanent and Democratic candidates generally advocating for a retention of the lower rates for middle-class incomes but a return to Clinton-era rates for high incomes. During his presidential election campaign, then candidate Obama stated that couples with incomes less than $250,000 would not be subjected to tax increases. This income level later became a focal point for debate over what defined the middle class.In August 2010, the Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(CBO) estimated that extending the tax cuts for the 2011-2020 time period would add $3.3 trillion to the national debt, comprising $2.65 trillion in foregone tax revenue plus another $0.66 trillion for interest and debt service costs.
The non-partisan Pew Charitable Trusts estimated in May 2010 that extending some or all of the tax cuts would have the following impact under these scenarios:
- Making the tax cuts permanent for all taxpayers, regardless of income, would increase the national debt $3.3 trillion over the next 10 years.
- Limiting the extension to individuals making less than $200,000 and married couples earning less than $250,000 would increase the debt about $2.2 trillion in the next decade.
- Extending the tax cuts for all taxpayers for only two years would cost $561 billion over the next 10 years.
The non-partisan Congressional Research Service
Congressional Research Service
The Congressional Research Service , known as "Congress's think tank", is the public policy research arm of the United States Congress. As a legislative branch agency within the Library of Congress, CRS works exclusively and directly for Members of Congress, their Committees and staff on a...
has estimated the 10-year revenue loss from extending the 2001 and 2003 tax cuts beyond 2010 at $2.9 trillion, with an additional $606 billion in debt service costs (interest), for a combined total of $3.5 trillion.
In late July 2010, analysts at Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
said letting the Bush tax cuts for those earning more than $250,000 expire would greatly slow economic recovery. However, Treasury Secretary Timothy Geithner said allowing the expiration would not cause such a slowing. The Obama administration proposed keeping tax cuts for couples making less than $250,000 per year. Economist Mark Zandi
Mark Zandi
Mark Zandi is an Iranian American economist and co-founder of Moody's Economy.com, a widely-cited source of economic analysis.. Moody's Economy.com is part of Moody's Analytics. Prior to founding Economy.com, Zandi was a regional economist at Chase Econometrics.He was born in Atlanta, Georgia of...
predicted that making the Bush tax cuts permanent would be the second least stimulative of several policies considered. Making the tax cuts permanent would have a multiplier effect of 0.29 (compared to the highest multiplier of 1.73 for food stamps).
Extension of Bush tax cuts
The issue came to a head in late 2010, during a lame-duck session of the 111th Congress.At the "Slurpee Summit
Slurpee Summit
The Slurpee Summit was a White House meeting between U.S. President Barack Obama and U.S. Congressional leaders that occurred on 30 November 2010. The name "Slurpee Summit" is a reference to an analogy Obama used while campaigning for the 2010 midterm elections...
" of November 30, President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
appointed Treasury Secretary Tim Geithner and Office of Management and Budget chief Jack Lew to help Republicans and Democrats hammer out an agreement on extending the Bush tax cuts. All 42 Republican Senators pledged to block all legislation in the lame-duck session until the tax matter was settled.
Congressional Democrats offered two attempts to extend the Bush-era rates for "middle income" families but restore the previous, higher rates for "high income" people. The first proposal had a cutoff at $250,000, while the second raised the dividing line to $1 million. Both proposals were able to pass in the House, but on December 4, 2010, both fell short in the Senate, getting only 53 votes and not the 60 needed for cloture.
On December 6, 2010, President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
announced a compromise tax package proposal had been reached, centered around a temporary, two-year extension of the Bush tax cuts. In particular, the framework included key points such as:
- Extending the 2001/2003 income tax rates for two years. Also, reforming the AMT to ensure an additional 21 million households will not face a tax increase. These measures are intended to provide relief to more than 100 million middle-class families and prevent an annual tax increase of over $2,000 for the typical family.
- Additional provisions designed to promote economic growth. $56 billion in unemployment insurance, an approximate $120 billion payroll tax cut for working families, about $40 billion in tax cuts for the hardest hit families and students, and 100 percent expensing for businesses during 2011.
- Estate tax adjustment. Rates would be 35 percent after a $5 million exemption.
Obama said, "I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession. ... So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do. ... As for now, I believe this bipartisan plan is the right thing to do. It’s the right thing to do for jobs. It’s the right thing to do for the middle class. It is the right thing to do for business. And it’s the right thing to do for our economy. It offers us an opportunity that we need to seize."
Administration officials like Vice President Joe Biden
Joe Biden
Joseph Robinette "Joe" Biden, Jr. is the 47th and current Vice President of the United States, serving under President Barack Obama...
then worked to convince wary Democratic members of Congress to accept the plan, notwithstanding a continuation of lower rates for the highest-income taxpayers. The compromise proved popular in public opinion polls, and allowed Obama to portray himself as a consensus-builder not beholden to the liberal wing of his party. The bill was opposed by some of the most conservative members of the Republican Party as well as by talk radio hosts such as Rush Limbaugh
Rush Limbaugh
Rush Hudson Limbaugh III is an American radio talk show host, conservative political commentator, and an opinion leader in American conservatism. He hosts The Rush Limbaugh Show which is aired throughout the U.S. on Premiere Radio Networks and is the highest-rated talk-radio program in the United...
and some groups in the Tea Party movement
Tea Party movement
The Tea Party movement is an American populist political movement that is generally recognized as conservative and libertarian, and has sponsored protests and supported political candidates since 2009...
. It was also opposed by several leading potential candidates for the Republican nomination in the 2012 presidential election
Republican Party (United States) presidential primaries, 2012
The 2012 Republican presidential primaries are the selection processes in which voters of the Republican Party will choose their nominee for President of the United States in the 2012 presidential election. The primary contest began with a fairly wide field, and is the first presidential primary...
, including Sarah Palin
Sarah Palin
Sarah Louise Palin is an American politician, commentator and author. As the Republican Party nominee for Vice President in the 2008 presidential election, she was the first Alaskan on the national ticket of a major party and first Republican woman nominated for the vice-presidency.She was...
and Mitt Romney
Mitt Romney
Willard Mitt Romney is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and is a candidate for the 2012 Republican Party presidential nomination.The son of George W...
, typically on the grounds that it did not make the Bush tax cuts permanent and that it would overall increase the national deficit.
In an interview during these debates, former President Bush said, "I wish they would have called it something other than the 'Bush tax cuts'. There'd probably be less angst amongst some to pass it." He argued strongly for maintaining the rates: "I do believe it's very important to send the signal to our entrepreneurs and our families that the government trusts them to spend their own money. And I happen to believe lower taxes is what stimulates economic growth and what we need now in our country is economic growth."
On December 15, 2010, the Senate passed the compromise package with an 81–19 vote, with large majorities of both Democrats and Republicans supporting it. Near midnight on December 16, the House passed the measure on a vote of 277–148, with only a modest majority of Democrats but a large majority of Republicans voting for the package. Before that, an amendment put forward by Democratic Representative Earl Pomeroy
Earl Pomeroy
Earl Pomeroy is a lobbyist and former U.S. Representative for , serving from 1993 until 2011. He is a member of the North Dakota Democratic-NPL Party.- Early life, education and career :...
and the progressives among the Democratic caucus to raise the estate tax – the ultimate sticking point of the deal for them and the cause of a minor revolt among those against it – failed on a 194–233 vote. The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
called the approved deal "the most significant tax bill in nearly a decade". President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 , was passed by the United States Congress on December 16, 2010 and signed into law by President Barack Obama on December 17, 2010....
, on December 17, 2010.
See also
- Taxation in the United StatesTaxation in the United StatesThe United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
- Tax cutTax cutA tax cut is a reduction in taxes. The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. Due to the perceived benefit in growing real incomes among tax payers politicians have sought to...
- Economic policy of the George W. Bush administrationEconomic policy of the George W. Bush administrationThe economic policy of the George W. Bush administration was a combination of tax cuts, expenditures for fighting two wars, and a free-market ideology intended to de-emphasize the role of government in the private sector...
- Economists' statement opposing the Bush tax cutsEconomists' statement opposing the Bush tax cutsThe Economists' statement opposing the Bush tax cuts was a statement signed by roughly 450 economists, including ten of the twenty-four American Nobel Prize laureates alive at the time, in February 2003 who urged the U.S. President George W. Bush not to enact the 2003 tax cuts; seeking and sought...
- Economic policy of Barack Obama
External links
- EGTRRA's impact on tax revenue and summary of changes, via irs.gov
- Special Report: Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), Professor John Wachowicz at the University of TennesseeUniversity of TennesseeThe University of Tennessee is a public land-grant university headquartered at Knoxville, Tennessee, United States...
- Effective Federal Tax Rates Under Current Law, 2001 to 2014, by the Congressional Budget OfficeCongressional Budget OfficeThe Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
- Fact Sheet on the Framework Agreement on Middle Class Tax Cuts and Unemployment Insurance, The White House