Tuesday, January 27, 2004

Don't Worry, Cut Taxes.

Douglas Holtz-Eakin, director of the Congressional Budget Office and a former economist in the Bush White House, said on Thursday that making Mr. Bush's tax cuts permanent would most likely have a "modestly negative" impact on long-term economic growth.

Mr. Holtz-Eakin said the initial impact of Mr. Bush's tax cuts was positive, because the cuts lowered marginal tax rates and gave people more incentive to work and produce.

But to the extent the tax cuts lead to higher deficits and greater government borrowing, he warned, they could have a "cumulative corrosive effect on capital accumulation, on national saving and on productivity."

-NY Times

So, these tax cuts basically do nothing good and there is no reason on Earth to make them permanent. In fact, the only people that really benefit from them are folks that are really rich (I suspect the upper-middle class would be hurt by slowed economic growth more than it would benefit from upper-incom tax reductions). However, like the Great Bill Safire tells us, to say that this administration is prefers to help the affluent at the expense of ordinary people is "class warfare" and neocommunist.


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