Bush Tax Cuts Argumentative Essay
Aside from having the largest benefit for the wealthy population, the Bush tax cuts were also controversial for a multitude of reasons. These tax cuts forced the government, Congress in particular, to make a variety of changes and adaptations to the new financial situation they would find themselves in. Due to the decrease in revenue the government would be receiving in taxes, Alterations in spending had to be expected. According to Isaac Shapiro, the Bush tax cuts “have been a major contributor to the dramatic shift from large projected budget surpluses to projected deficits as far as the eye can see.” This is largely due to the amount of government spending not properly adjusting to the reduced budget cause from the tax act. The surplus which
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the United States possessed at the beginning of the Bush administration quickly began to deplete. By the end of the Bush administration, there was an additional 5.8 trillion dollars in debt added to the national budget (Kimberly Amadeo). While a large amount of that total was due in part to unplanned political issues such as the War on Terror, a considerable amount was due to the lack of revenue the government was receiving from taxpayers.
A major goal and intention of the Bush tax cuts was to reduce the unemployment rates by creating jobs. This offers a defense for the impact the tax act had on the higher amounts of money the rich would save on their taxes. The defense often used by Bush and the Republican Party was that by allowing the rich to have more money, they would serve as the job creators for the economy through businesses. Though this was the plan which was laid out during and after the implementation of the tax plans in 2001, there actually was an increase in unemployment rates from 2001-2003. According to the Bureau of Labor Statistics, at the start of George Bush’s presidency, the unemployment rate was at 4.2% while at the same point in 2003, the unemployment rate was 5.9%. This unexpected increase in unemployment rate was eventually followed by another tax cut which the Republican Party was not entirely in favor of. The Congressional vote to pass this new tax act which was split 50/50 until vice president, Dick Cheney, decided to cast his vote in favor of lowering taxes with the condition that it also comes to an end in the year 2010.
During the start of Bush’s first term as president, with the economy slipping into a recession, the tax cuts implemented in 2001 did seem give the impression that there was going to be potential for a positive effect to come from lowering taxes.
However, it was the downward sequence of events that followed the tax cuts which made it seem like a bad idea to begin with. Starting with the rationale behind the tax cuts when they were proposed, it was undeniable that the main class benefitting from maintaining a portion of their income would be the rich due to the large amounts of money they would be saving. However, the defense of this notion was the idea that the money which the rich would be saving would be used to create jobs for the working class. The failing portion of this idea came due to the fact there was no large quantity of additional jobs came from the large amounts of money the rich saved. While there were a variety of events that unfolded which perhaps hindered the results Bush planned on obtaining from his tax plans such as the War on Terror, ignited by the 9/11 terror attacks, there is no solid evidence that the tax plans created jobs at all. From my perspective, allowing lower class citizens to keep a larger portion of their checks initially seems like a great idea, but to sustain long term economic growth this idea quickly becomes negative. Since the tax cuts were not saving those with lower income a large amount of money, they were not spending greater amounts
of their income in the market. Now this placed a heavy reliance on the rich to put their additional income into the market and potentially create jobs, but when this did not happen the economy began its rapid decline. I believe part of the reason people were not spending the extra money they now had was because the tax plans were set to expire in 2010. I don’t think it is possible to get people, particularly investors, to feel confident in spending their money on long term assets when the percentage at which they are being taxed is set to increase at a specific date in time. In relation to lower income citizens, it is likely that they felt inclined to save this additional money, especially once it became recognized that the economy was appearing to be on a steady decline.
the United States possessed at the beginning of the Bush administration quickly began to deplete. By the end of the Bush administration, there was an additional 5.8 trillion dollars in debt added to the national budget (Kimberly Amadeo). While a large amount of that total was due in part to unplanned political issues such as the War on Terror, a considerable amount was due to the lack of revenue the government was receiving from taxpayers.
A major goal and intention of the Bush tax cuts was to reduce the unemployment rates by creating jobs. This offers a defense for the impact the tax act had on the higher amounts of money the rich would save on their taxes. The defense often used by Bush and the Republican Party was that by allowing the rich to have more money, they would serve as the job creators for the economy through businesses. Though this was the plan which was laid out during and after the implementation of the tax plans in 2001, there actually was an increase in unemployment rates from 2001-2003. According to the Bureau of Labor Statistics, at the start of George Bush’s presidency, the unemployment rate was at 4.2% while at the same point in 2003, the unemployment rate was 5.9%. This unexpected increase in unemployment rate was eventually followed by another tax cut which the Republican Party was not entirely in favor of. The Congressional vote to pass this new tax act which was split 50/50 until vice president, Dick Cheney, decided to cast his vote in favor of lowering taxes with the condition that it also comes to an end in the year 2010.
During the start of Bush’s first term as president, with the economy slipping into a recession, the tax cuts implemented in 2001 did seem give the impression that there was going to be potential for a positive effect to come from lowering taxes.
However, it was the downward sequence of events that followed the tax cuts which made it seem like a bad idea to begin with. Starting with the rationale behind the tax cuts when they were proposed, it was undeniable that the main class benefitting from maintaining a portion of their income would be the rich due to the large amounts of money they would be saving. However, the defense of this notion was the idea that the money which the rich would be saving would be used to create jobs for the working class. The failing portion of this idea came due to the fact there was no large quantity of additional jobs came from the large amounts of money the rich saved. While there were a variety of events that unfolded which perhaps hindered the results Bush planned on obtaining from his tax plans such as the War on Terror, ignited by the 9/11 terror attacks, there is no solid evidence that the tax plans created jobs at all. From my perspective, allowing lower class citizens to keep a larger portion of their checks initially seems like a great idea, but to sustain long term economic growth this idea quickly becomes negative. Since the tax cuts were not saving those with lower income a large amount of money, they were not spending greater amounts
of their income in the market. Now this placed a heavy reliance on the rich to put their additional income into the market and potentially create jobs, but when this did not happen the economy began its rapid decline. I believe part of the reason people were not spending the extra money they now had was because the tax plans were set to expire in 2010. I don’t think it is possible to get people, particularly investors, to feel confident in spending their money on long term assets when the percentage at which they are being taxed is set to increase at a specific date in time. In relation to lower income citizens, it is likely that they felt inclined to save this additional money, especially once it became recognized that the economy was appearing to be on a steady decline.