The Bush-era tax cuts accounted for only 16 percent of the swing from a projected budget surplus of $5.6 trillion to an actual deficit of $6.1 trillion from 2001 to 2011, according to Sen. Rob Portman, R-Ohio.
And as only one-fourth of the tax decreases went to “upper-income” earners, they accounted for only 4 percent of the shift, the former White House budget director under George W. Bush said in a statement Thursday. He didn’t specify what constitutes “upper-income.” Portman’s numbers came from an analysis of Congressional Budget Office (CBO) data.
The 4 percent total is actually too high he said. That’s because the CBO doesn’t take into account any of the positive impact of tax cuts on investment, savings, and economic growth.
In any case, the CBO statistics put the lie to President Barack Obama’s claim that we need to raise taxes on those with an annual income of at least $250,000, said Portman, who is reportedly on Mitt Romney’s short list for a running mate.
“While President Obama calls for higher taxes on jobs creators, two new [CBO] reports undercut his class warfare argument and the basis for calls for higher taxes,” Portman said.
“While I doubt these new studies will cause President Obama to change his tune, because too often, with this president, politics trumps good policy, yet another of his straw men has fallen flat.”
The CBO data show that new spending and net interest were three times more responsible for the swing to deficits than the tax cuts – and 12 times more responsible than the upper-income portion of the tax decreases.
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