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It would require a full-time staff person to respond to all the inaccuracies we regularly see in Washington Post’s “The Fact Checker” column by Glenn Kessler, but an episode from this week really stands out.
Kessler attempts to pick at a segment of President Obama’s speech on Tuesday in Kansas, during which he said,
“I mean, understand, it’s not as if we haven’t tried this theory. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country…”
Kessler admits that “it is correct that most of the benefits of the tax cuts flowed to the wealthy” but then writes that Obama “should not suggest that the Bush tax cuts were only aimed at the wealthy, since that is not correct.”
In truth, the Bush tax cuts were “aimed at the wealthy,” and a few bits and scraps were dropped to low- and middle-income people to distract inattentive people like Glenn Kessler from this fact. We estimated that by 2010, when the Bush tax cuts were fully phased in, about 52 percent of the benefits went to the richest five percent of taxpayers and just under 75 percent of the benefits went to the richest fifth of taxpayers. Less than 13 percent of the benefits went to the bottom three fifths of taxpayers. Can anyone seriously doubt that the Bush tax cuts were “aimed at the wealthy”?
It’s true that they are slightly less aimed at the wealthy today because the part of the Bush tax cuts that repealed the estate tax was partially extended, rather than fully extended, in the December 2010 deal that extended all the tax cuts for two years. We projected the distribution of the tax cuts in the event that they’re extended again in 2013 (including the estate tax cut currently in place) and the figures are not much different from our 2010 figure.
Kessler also complains that, “The Bush tax cuts have been roundly criticized for being inefficient and poorly designed, but it is a stretch for Obama to blame slow job growth on the tax cuts. There are many factors that affect job growth…”
This actually seems like a misinterpretation of what President Obama said. The President seems to be making the point that the sole Republican response to economic downturns is to cut taxes, particularly tax cuts for the wealthy investor class, and this doesn’t get the job done. Research backs this up. Economic growth was lower after these types of tax cuts were enacted in the Reagan and George W. Bush years than after the tax hikes enacted during the Clinton years.
This is not to say that President Obama or Democratic leaders have done a stellar job on economic policy. Kessler rightly points out that President Obama’s tax plan, which was filibustered by the Republican minority in the Senate last year, would have extended most of the Bush tax cuts even while allowing those going exclusively to the very rich to expire. Still, this doesn’t change the fact that the Bush tax cuts were “aimed at the wealthy” and failed to help our economy in any of the ways that their proponents promised they would.