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. bush 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 assess second-stringer atonement Act of 2001 (EGTRRA). EGTRRA included lowering of marginal income revenue enhancement rate for all valuepayers, lowering taxes of m either married couples by increasing the standard deduction for married joint filers, and enlarge pip-squeak tax credits. The Act also decreased rates on dividend income as well as capital gains, and introduced baffle 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 chela tax credi t, and calls for a phased-in repeal of the estate tax, was signed into righteousness (United States Code, 2003). The proposal of wide-ranging tax cuts sparked vociferous political unexclusive 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 slick 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 harm of most taxpayers. This chemical group argued the Keynesian position that brass spending was necessary to stimulate e conomic occupation. The purpose of this c! omposition 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 constitution 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, purchase order it on our website: OrderEssay.net

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