According to an analysis by Pulitzer-Prize winning reporter David Cay Johnston, formerly of the New York Times, the Bush tax cuts, touted as a harbinger of prosperity by the Republican Party, actually robbed each American taxpayer of $48,000 in pre-tax personal income during the twelve years of their existence, for a total of approximately 6.6 trillion dollars.
This is more than enough to pay for every student loan, car loan, and credit card debt in the U.S, while still leaving 2.4 trillion dollars in the pockets of Americans. It is the equivalent of an extra 11 dollars a day lost to each American taxpayer over the last twelve years.
Johnston analyzed rates of long term average personal incomes as reported by American taxpayers from 2000-2012, adjusting for inflation and population growth. His tables are contained in this article:
In 10 of the 12 years when the Bush tax cuts were in effect, the average income shown on tax returns was lower than in 2000. In the two upside years, average income rose modestly, up $504 for 2006 and $1,744 for 2007.
Total those 12 years and the net shortfall per taxpayer comes to $48,010.
He notes that after twelve years of tax cut mania average real hourly wages are now 6% less than they were in 1972-1973.
Less than they were forty years ago. Where did the money go?
The damage wrought to American incomes was bad enough, but the Bush tax cuts left an even more damaging legacy. While the prosperity of the previous decade was simply wiped out by these cuts, and with it the means and will to sustain prosperity through government investment and infrastructure improvements, the tax cut mentality inspired more of the same down at the state levels, multiplying the effects:
Of the total national increase in income in 2012 over 2009, an astonishing one-third went to just 16,000 households, and almost 95 cents of each dollar went to the top 1 percent, while the bottom 90 percent lost ground.
Needless to say, this was not what we were told in 1999 by candidate George W. Bush. On the contrary, the future “Terror President” promised:
Speaking to MSNBC host Chris Hayes on Wednesday, Johnston recalled that President George W. Bush had promised during his 2000 campaign that his tax cuts would lead to greater prosperity.
And the investigative reporter pointed out that tax cuts not only damaged personal wealth, but they also took a toll on government services, as a mindless tax cutting frenzy became the dominant philosophy at the local and state levels, leading to budgetary freefalls like we’re witnessing today in states like Kansas:
“What we’re seeing in America today is our country is falling apart, we are not maintaining it, we are not doing the things we need to do to continue to have our government,” Johnston explained. “And the answer that we’re provided with by people like [Republican Kansas Gov.] Sam Brownback: ‘We need more tax cuts.’ You know, what are we going to do? Bleed ourselves to death?”
“[A] tax cut designed to sustain our nation’s prosperity — and reflect our nation’s decency … The entrepreneurs of America create jobs, take risks and make their profits with honor. My tax cut plan will expand their ranks by encouraging American enterprise … Low tax rates are a powerful economic tool to promote a higher standard of living for all Americans.”
We are living now with the end result of the Republican “experiments,” the “profits made with honor” by the “entrepreneurs”: chronic unemployment and underemployment, gross income inequality, people in their 30’s unable to buy homes due to unprecedented student loan debt (debt often incurred to escape from the dismal jobs market for young people), and a Republican-dominated House that balks at raising the paltry minimum wage, but, as demonstrated today, is perfectly content with inflicting on all of us another 263 Billion in tax cuts for businesses.
Think about what you could have done with that extra $48,000 every time you hear the word “Bush.”
Advocates of so-called trickle-down economics have grounded their thinking in the idea that the entire pool of US wage earners benefits financially when the rich get increased tax cuts. According to Johnston, however, this is disproven by actual IRS statistics. Quite the opposite has happened to US workers; more than $6.5 trillion has gone missing from the incomes of those who are not wealthy. Meanwhile, the rich are getting richer because of enormous tax cuts and a record-breaking stock market.