| Why Bother? |
21 April 2003
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Bush's Tax Cut -- A Tempest in a Tea Pot
It is a matter of faith for Republicans that tax cuts are good things. Those with an understanding of economics realize that that is not always true. Those who have been paying attention to the latest arguments within the GOP understand that whatever comes out of Congress this year won't matter -- it isn't big enough to matter.
On the face of it the debate between $350 billion and $550 billion in tax cuts looks significant. Of course, if it were all in one year, it would be a big deal. But these cuts are spread out over a decade. On an annual basis the sniping is over a difference of just $20 billion - -in a trillion dollar plus budget.
Just what the Republicans are trying to achieve is something of a mystery. The cut won't boost the economy in time to address the re-election problems of a faltering GDP. It won't reduce spending in general -- the war will cost about $100 billion this year. It won't even reduce social spending by a measurable amount in any given year.
Could it be that they have uncovered the truth? That America can't really afford a tax cut right now, and the 10-year time horizon is a way to make the cut look big, when in fact the issue is marginal at best?