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 assess 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 task income rate for all taxpayers, lowering taxes of m any married couples by increasing the standard deduction for married joint filers, and cast up pip-squeak tax credits. The Act also decreased rates on dividend income as well as capital gains, and introduced ravel changes to retirement plans (United States Code, 2001). In May, 2003 the Jobs and Growth Tax Relief rapprochement Act of 2003 (JGTRRA), which accelerated some provisions of the 2001 Act, doubled the tike tax credit, and calls fo r a phased-in repeal of the estate tax, was signed into law of nature (United States Code, 2003). The proposal of wide-ranging tax cuts sparked vociferous political familiar 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 grapheme 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 wrong of most taxpayers. This chemical group argued the Keynesian position that political sympathies spending was necessary to stimulate economic occupation. The purpose of this ! newsprint 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 policy 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 condition to levels of government spending,...If you want to get a full essay, format it on our website: OrderEssay.net

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