August 28, 2008
New York Sun on Tax Foundation?s Examination of 2001 and 2003 Bush Tax Cuts
"Bush Tax Cuts Increased Tax Base, Study Says"
By Julie Satow
Taxpayers responded to President Bush's tax cuts in 2001 and 2003 by generating greater taxable income, according to a new paper to be published this fall in the National Tax Journal. In fact, taxpayers reported so much more income than was anticipated, it likely offset as much as 40% of the revenue that was lost by lowering the top two tax brackets, the paper, authored by a vice president for economic policy at the Tax Foundation, Robert Carroll, and economists Gerald Auten and Geoffrey Gee of the Department of the Treasury, found.
"This research illustrates that, while the lower tax rates have not paid for themselves, they do provide important economic benefits and can expand the tax base to such an extent that they cost the federal government substantially less revenue than the casual observer might think," Mr. Carroll, who was previously the deputy assistant secretary for tax analysis in the Office of Tax Policy at the Treasury, wrote.
