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January 09, 2003

Bush's $1.5 trillion Tax Cut

As Max notes, Bush's claim that his tax cut will cost only $670 billion is not exactly accurate.

Add in additional interest costs and this jacks the basic cost, according to Brookings' Bill Gale, to $899 billion.

But Bush claims to also be gunning to make all the tax cuts from the 2001 bill permanent, although they are now slated to expire in 2010. Add making the tax cut permanent and you get another $600 billion added to the tab by 2012.

And there is still the nagging problem of the Alternative Minimum Tax, which with all these additional credits threatens to entangle more middle class taxpayers. Reforming it could cost the treasury up to $285 billion by 2010.

Between the 2001 bill and this one, Bush's goal is to blow a $3 trillion hole in the budget over ten years, or $300 billion per year on average.

Update: CNN Inside Politics is reporting that Lincoln Chafee (R-RI), Susan Collins (R-ME) and George Voinovich (R-OH) have all criticized Bush's plan and will oppose it in its present form. Collins was especially critical of the fact that Bush could not find any room for aid to states and cities facing fiscal meltdown.

Senators Dianne Feinstein, Democrat of California, and Lincoln D. Chafee, Republican of Rhode Island, said they would introduce legislation to freeze the top income-tax rate at the current level of 38.6 percent "until such time as the federal budget returns to surplus," as Ms. Feinstein put it. She pointed to a chart showing that freezing the top rate, now applied to adjusted gross incomes exceeding $312,000 a year, would save $88 billion by 2010 and $132 billion by 2012.

Posted by Nathan at January 9, 2003 04:16 PM

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Comments

Pay no mind to the comments of Senator V. This is his typical ploy: make big waves for the Ohio media showing his 'independance' from chimpco, only to quietly cave later when few people are paying attention.

He's a toady and will come around in the end once he drinks the chimpco cool aide.

Posted by: jdw at January 9, 2003 05:16 PM

RE:BUSH'S TAX CUT:I know of few Blacks who own stock!

Posted by: Larry Ziegler at January 10, 2003 04:12 PM

Does Bush have something against the Americans of ten years hence? Does he know something we don't?

Posted by: John Isbell at January 10, 2003 06:58 PM

"Does Bush have something against the Americans of ten years hence?"

Perhaps Bush, like many Christian fundamentalists, believes the future of the world isn't worth looking after since Jesus is coming back Real Soon Now.

Posted by: Luke Francl at January 12, 2003 08:48 PM

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