CNBC.com's Jeff Cox needs to brush up on his financial history.
He believes that George W. Bush's 2001 and 2003 tax cuts affected only the highest-earning taxpayers, i.e., those who gross $250,000 a year of more. He's wrong.
Here's part of what Cox posted this morning (erroneous statement is bolded; HT to Mark Levin in his Thursday broadcast):
Letting Bush Tax Cuts Die Would Kill Recovery: Analysts
The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.
The cuts were enacted in 2001 and 2003 under President George W. Bush and covered those earning more than $250,000, but they are set to expire at the end of this year.
Deutsche said the drag on gross domestic product should they lapse could be as much as 1.5 percent, with the more likely impact at 1.1 percent.
The impact would be worse, the analysts said, if Congress fails to fix the Alternative Minimum Tax, which was enacted in 1969 to make sure rich people pay taxes but was never indexed for inflation, and thus is now hitting middle-income workers.
... The opinion runs counter to that of Treasury Secretary Timothy Geithner, who said earlier this week that allowing the cuts to expire would not cause the economy to re-enter recession. The administration has proposed letting most of the tax cuts stand, but eliminating the ones for the top-tier earners.
Deutsche compared the situation to Japan in the 1990s, when the government let tax cuts expire and cut stimulus, leading to another leg down in the recession and ensuring the nation's "lost decade" of no economic growth.
While the US is headed toward unmanageable debt levels, now is not the time to start tightening the money supply, the analysts said.
It wouldn't have taken much of an effort for Cox to learn the truth. In fact, it took me about 5 minutes to find the following items (too bad documenting them doesn't go as quickly):
- From CBS News (May 28, 2003; "Bush Signs Tax Cuts Into Law") -- You could tell that the network's Jarrett Murphy wasn't happy with having to report it, telling readers that "... Mr. Bush said the tax legislation will provide relief to 136 million American taxpayers." It's as if there was no reason to believe the president.
- From the Tax Foundation (June 21, 2007) -- "... the Bush tax cuts were mainly across-the-board cuts in tax rates ..."
- USA Today (May 19, 2003; three-paragraph excerpt from "Bush's drive for tax cuts fueled by his principles") -- Reporters Judy Keen; Laurence McQuillan quote Bush as saying in part: ""Across-the-board tax relief does not happen often in Washington, D.C."
Cox wouldn't even have had to go to Google or Google's news archive to learn how wrong he is. More recently, as in two weeks ago, Bloomberg briefly explained what the Bush tax cuts did in a report that was primarily about how Former Federal Reserve Chairman Alan Greenspan (sigh) wants everyone's taxes to go up next year ("Greenspan Calls for Congress to Let All Bush Tax Cuts Expire"):
... Bush tax cuts that passed in 2001 and 2003 gave middle- income earners a 10 percent rate on couples’ first $14,000 in income; subsidies for college expenses, a higher child-care credit and relief from the marriage penalty. Keeping those and other reductions for the 130 million households earning less than $250,000 would cost about $300 billion a year, according to the congressional Joint Committee on Taxation.
The Bloomberg item also notes that "President Barack Obama campaigned for election in 2008 on a promise of extending the Bush tax reductions for families earning up to $250,000 while eliminating the cuts for higher- income Americans, a position also embraced by most congressional Democrats." Of course this means that many other Americans earning below that amount received tax cuts.
This is a pretty blatant error, especially considering that it's from a business network. Tighten things up, guys and gals.
Cross-posted at BizzyBlog.com.
