Bush succeeds with tax cuts
Observer Viewpoint | Monday, April 5, 2004
The economic growth in 2003 and 2004 has proven Bush’s critics dead wrong. The Bush tax cuts, modeled after the JFK and Reagan tax cuts, were designed to stimulate all facets of the economy, and have proven successful. The U.S. Commerce Department announced that the U.S. economy expanded at a rate of 7.2 percent in the third quarter – the fastest rate of growth since 1984, since the last major tax cuts. Reagan and JFK knew it. Bush knows it. Tax cuts work.
The Bush plan slashed taxes across the board – not just for the wealthy. Personal income tax brackets were cut by 2 percent each, for taxpayers of all income levels. The dividend tax cut, in part, explains why the stock market is reaching pre-recession levels. Most of middle-class America “the bulk and backbone of this country” is invested, in some form, in the stock market (i.e., retirement plans). It only makes sense to allow them to keep more of what they earn and to encourage investment. There is more incentive to invest more money, which will continue to spur the market.
Small business owners are retaining more capital, allowing them to hire more workers and create new jobs. According to the law, sole-proprietorships and S corporations must pay personal income tax. Thus, reducing personal income taxes for all taxpayers tends to help small businesses. That may explain why 308,000 new jobs were created in this past month of March. The “jobless recovery” argument is futile now.
Since August, we’ve added 750,000 new jobs. Consumers have more in their pocket, which could explain why consumer spending is up. Inflation is low. Manufacturing productivity is up. Since 2000, after-tax disposable income is up 10 percent. We currently have a 68 percent home ownership rate the highest rate ever. Also, 1.5 million minority families have moved into homes of their own. Family incomes are up, which is, in part, due to the child tax credit of $1,000 per child. Numbers do not lie. Considering Sept. 11, the dotcom collapse and the corporate scandals, I think what Bush has managed to do with his tax cuts is quite impressive.