CBO Report 2005: In the absence of the Bush Tax Cuts the nation would be returning to a surplus in 2011

[웃 910]

Keep in mind this was reported in 2005:

http://www.cbpp.org/...?fa=view&id=598

Without the Tax Cuts, Deficit Picture Would be Dramatically Improved

This year's deficit would be much smaller if the President's tax cuts had not been enacted. Based on the official cost estimates by the Joint Committee on Taxation, and accounting for the increased interest payments caused by borrowing to finance the tax cuts, the cost of the tax cuts enacted in 2001 and 2003 is equal to about 2 percent of GDP this year, while this year's deficit equals 2.7 percent of GDP.^a

Looking out over the next couple of years as well, the deficit picture would look far different except for the tax cuts. As the figure below indicates, large deficits will persist on into the future under the official CBO baseline forecast. But in the absence of the tax cuts, the baseline would show the nation returning to a surplus in 2011.

Further, because of the tax cuts (assuming they are extended), revenues will constitute a smaller share of the economy over the next 10 years than they averaged in the 1950s, the 1960s, the 1970s, the 1980s, or the 1990s.

^aEven if one were to assume some positive feedback effects on the economy, the cost of the tax cuts would represent a large share of the current deficit.

Edited August 1, 2011 by Lord Infamous

[웃 910]

If I'm around in 2020 someone send me a PM to update actual numbers compared to projections...Apparently some think deficits cannot be projected and that these numbers are just guesses and if they come true they were lucky guesses.

http://www.cbpp.org/cms/index.cfm?fa=view&id=3490

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [7] By 2019, we estimate that these two policies will account for almost half — nearly $10 trillion — of the $20 trillion in debt that will be owed under current policies.[url=http://www.cbpp.org/cms/index.cfm?fa=view&id=3490#_ftn8][/url]

[Obama 2012 1,714]

You know what none of this takes into account?

SPENDING!

You are so trying to prove your point (to your self I think at this point) that you keep leaving out the one factor that matters the most.

It's like you're trying to solve Z x Y x L = P, but you're leaving out factor Y in there each time.

At this point it's become a complete obsesion with you though blaming a singular instance for where we are today. You're looking for a way to justify what you see and why the government deficit and debt could be so high. You couldn't rationalize the honest truth of greedy pigs in Washington, that human beings would pull such BS on other human beings, etc. You need something to comfort you, to feel better about it all, so you grasp on to a notion/an idea that can calm you and hopefully bring you to a point that will satisfy the item that's in front of you. You'd rather live in a delusional universe/world than face the truth anymore. Which that's fine and it's how people cope in troubling situations. However it doesn't change the fact that it's completely wrong in every way.

Want to know how far the rabbit hole really goes? I seriously don't think you do. Otherwise you would be having spending as a primary factor here and you'd be talking a lot more about the underground economy and a lot less about the "wealthiest" of Americans.

[SMOKE 1,426]

kinda makes you wonder why obama extended them doesn't it? now the correct name is 'the obama tax cuts.'

[웃 910]

Take your head out of the sand. This wasn't a guess. It became reality.

Flashback to 2005:

The Long-Term Costs

If the tax cuts the Administration wants to make permanent are made permanent, current relief from the swelling Alternative Minimum Tax is continued, as most observers expect it will be (the Administration supports continuation of AMT relief but has not yet put forward a specific AMT proposal), and the additional tax cuts the Administration has proposed are enacted, the future costs of these tax cuts will be extremely large.

• Over the 10-year period from 2005 through 2014, the direct costs of the enacted and proposed tax cuts would total $2.8 trillion. The cost would equal 2.1 percent of the economy in 2014.
• From 2005 through 2014, the increased interest payments on the debt that result from the tax cuts would amount to $1.1 trillion. The interest payments would grow steadily with each passing year and in 2014 would equal $218 billion — or 1.2 percent of the economy. This amount alone is as large a share of the economy as the government now spends on all programs and activities under the Departments of Education, Homeland Security, Interior, Justice, and State combined.
• Considering both the direct costs of the tax cuts and the associated increase in interest payments, the tax cuts would increase deficits by nearly $4 trillion between 2005 and 2014.
• Over the next 75 years, the cost of these tax cuts — assuming they are made permanent — would be more than the combined shortfall in the Social Security and Medicare Hospital Insurance trust funds.

In the absence of the tax cuts, the deficit picture over the coming decade would look very different. Without the tax cuts, the deficit would be under $100 billion in most years. With the tax cuts, the deficit is projected to grow to more than $675 billion by the end of the decade.[2] If the tax cuts are extended, revenues over this period will remain at quite low levels by recent historical standards. Over the next decade, average revenues as a share of GDP would be lower than the average levels of revenues in the 1960s, 1970s, 1980s, and 1990s.

[Obama 2012 1,714]

Take your head out of the sand. This wasn't a guess. It became reality.

Flashback to 2005:

The Long-Term Costs

If the tax cuts the Administration wants to make permanent are made permanent, current relief from the swelling Alternative Minimum Tax is continued, as most observers expect it will be (the Administration supports continuation of AMT relief but has not yet put forward a specific AMT proposal), and the additional tax cuts the Administration has proposed are enacted, the future costs of these tax cuts will be extremely large.

• Over the 10-year period from 2005 through 2014, the direct costs of the enacted and proposed tax cuts would total $2.8 trillion. The cost would equal 2.1 percent of the economy in 2014.
• From 2005 through 2014, the increased interest payments on the debt that result from the tax cuts would amount to $1.1 trillion. The interest payments would grow steadily with each passing year and in 2014 would equal $218 billion — or 1.2 percent of the economy. This amount alone is as large a share of the economy as the government now spends on all programs and activities under the Departments of Education, Homeland Security, Interior, Justice, and State combined.
• Considering both the direct costs of the tax cuts and the associated increase in interest payments, the tax cuts would increase deficits by nearly $4 trillion between 2005 and 2014.
• Over the next 75 years, the cost of these tax cuts — assuming they are made permanent — would be more than the combined shortfall in the Social Security and Medicare Hospital Insurance trust funds.

In the absence of the tax cuts, the deficit picture over the coming decade would look very different. Without the tax cuts, the deficit would be under $100 billion in most years. With the tax cuts, the deficit is projected to grow to more than $675 billion by the end of the decade.[2] If the tax cuts are extended, revenues over this period will remain at quite low levels by recent historical standards. Over the next decade, average revenues as a share of GDP would be lower than the average levels of revenues in the 1960s, 1970s, 1980s, and 1990s.

Did you know that tax receipts in 2007 were the largest dollar amount they had ever been?

You can try and spin things all you want, but the fact remains that revenues were just fine until the crash.

As I said, look into the rabbit hole. The tax cuts have nothing to do with it.

[I AM NOT THAT GUY 5,715]

The OP has nothing to do with the CBO other than to refer to it in passing.

Failed poll: Where is I don't care?

[Usui Takumi 1,562]

kinda makes you wonder why obama extended them doesn't it? now the correct name is 'the obama tax cuts.'

Unless they are tying it to this new bill, I imagine they will probably expire for 2012 because there isn't much left for Obama to give ground on now. I'm already factoring in my new tax level for next year.

[IR5FORMUMSIE 850]

You know what none of this takes into account?

SPENDING!

You are so trying to prove your point (to your self I think at this point) that you keep leaving out the one factor that matters the most.

It's like you're trying to solve Z x Y x L = P, but you're leaving out factor Y in there each time.

At this point it's become a complete obsesion with you though blaming a singular instance for where we are today. You're looking for a way to justify what you see and why the government deficit and debt could be so high. You couldn't rationalize the honest truth of greedy pigs in Washington, that human beings would pull such BS on other human beings, etc. You need something to comfort you, to feel better about it all, so you grasp on to a notion/an idea that can calm you and hopefully bring you to a point that will satisfy the item that's in front of you. You'd rather live in a delusional universe/world than face the truth anymore. Which that's fine and it's how people cope in troubling situations. However it doesn't change the fact that it's completely wrong in every way.

Want to know how far the rabbit hole really goes? I seriously don't think you do. Otherwise you would be having spending as a primary factor here and you'd be talking a lot more about the underground economy and a lot less about the "wealthiest" of Americans.

TAX CUTS ARE A FORM OF SPENDING!!!!! It's that simple. Welfare for the rich.

kinda makes you wonder why obama extended them doesn't it? now the correct name is 'the obama tax cuts.'

Rich people don't want to pay.

[Mr. Big Dog 10,747]

Did you know that tax receipts in 2007 were the largest dollar amount they had ever been?

They fell far below what you'd expect them to be relative to GDP even in 2007.

[mawilson 2,133]

The Republican-Democrat Regime will never let the Bush tax cuts expire.

[I AM NOT THAT GUY 5,715]

Rich people don't want to pay.

Some say they want to, like our young President, but nobody is stopping them from mailing that check to the US Treasury.

[Usui Takumi 1,562]

The Republican-Democrat Regime will never let the Bush tax cuts expire.

What's there to compromise on though? Obama and the Dems will push for the top bracket expiring. Republicans will try to get the whole kitten permanent. What reason does Obama have to compromise? At the end of the day, letting the whole thing expire is superior to allowing it to be extended. UI was the bargain point last year....it won't be this year.

[웃 910]

The Republican-Democrat Regime will never let the Bush tax cuts expire.

Why would they? The benefits to the poor are just so spectacular. The nation is fvcked except the lower class is booming!

[Obama 2012 1,714]

TAX CUTS ARE A FORM OF SPENDING!!!!! It's that simple. Welfare for the rich.

You're extremely delusional if that's what you think.

Tax cuts are not and cannot be spending. The only "spending" side of taxes are what we call subsidies, tax credits, etc. A tax cut however is allowing people to keep and invest more of their personal money. Money that was never the government's in the first place and does not become the government's until they demand it.

On the "rich" comment, Since when is allowing people to KEEP THEIR OWN MONEY, "welfare?"