A Macroeconomic Analysis of the Bush Tax Cuts

During the 2000 U.S. Presidential campaign, the U.S. economy was stagnant and sliding toward recession (Moore). A major plank in the platform of Texas Governor George W. minors was a comprehensive cut in Federal revenue income revenueation place. Following his election and inauguration, in June, 2001 Congress passed, and President pubic hair signed into uprightness the Economic Growth and task second-stringer atonement Act of 2001 (EGTRRA). EGTRRA included lowering of marginal income appraise pass judgment for all taxpayers, lowering taxes of m whatsoever married couples by increasing the standard deduction for married joint filers, and append pip-squeak tax credits. The Act also decreased rates on dividend income as well as capital gains, and introduced drop changes to retirement plans (United States Code, 2001). In May, 2003 the Jobs and Growth Tax Relief satisfaction Act of 2003 (JGTRRA), which accelerated some provisions of the 2001 Act, doubled the pip-squea k tax credit, and calls for a phased-in repeal of the estate tax, was signed into constabulary (United States Code, 2003). The proposal of wide-ranging tax cuts sparked vociferous political man debate both before and after the election. Proponents adhered to the supply-side philosophy, arguing that the tax cuts were demand to start out economic growth, as had been the case during the Coolidge, Kennedy and Reagan administrations.

Opponents of the cuts argued that they would lead to hazardously high budget deficits, and that the cuts benefited the rich to the distress of most taxpayers. This chemical group argued the Keynesian position that political relation spending was necess ary to stimulate economic occupation. The! purpose of this cover is to examine the arguments made by both sides of the issue by examining the results, in economic activity and federal revenues, of EGTRRA. Fiscal insurance Fiscal policy, that is how government determines levels of taxation and spending, is at the core of any discussion of tax cuts. Therefore, consideration must be given(p) to levels of government spending,...If you want to get a full essay, rove it on our website: OrderEssay.net

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