Bushonomics: In His Own Words
WHITE HOUSE WATCH: Bush's New Views On Taxes, Deficit
By ALEX KETOAugust 9, 2004 4:48 p.m.
A Dow Jones Newswires Analysis
WASHINGTON -- In an unscripted exchange with supporters during a campaign stop, President George W. Bush Monday offered new, and at times contradictory, views on taxes and the deficit.
Among the points he made while visiting Annadale, Va., was that the "real rich" don't pay their fair share of taxes anyway, and that the tax cuts he pushed through Congress have helped worsen the budget deficit.
Despite the comments, Bush remained committed to his overall campaign message that his tax cuts should be made permanent, and said letting the tax cuts expire would harm the economy. Nevertheless, the president's remarks likely caused his political handlers to cringe.
In his most remarkable points, Bush argued that if Democratic presidential candidate Sen. John Kerry wins the election, small businessmen and women will bear the brunt of any tax hikes he institutes.
"Just remember, when you're talking about, oh, we're just going to run up the taxes on a certain number of people - first of all, real rich people figure out how to dodge taxes," Bush said.
"And the small business owners end up paying a lot of the burden of this taxation," he added.
Kerry has said he wants to raise taxes on individuals earning more than $200,000 a year as a way to increase government revenues and to bring the deficit back under control.
Bush has said his top-end tax cuts were primarily aimed at helping small businesses retain more of their profits, but statistics don't bear him out on this claim. This is because only a small number of small businesses ever earn more than $200,000 a year.
In addition to arguing the wealthy are dodging their fair share of the tax burden, Bush also said he simply has something against the idea of boosting taxes for the wealthy.
"I want to make another point. We shouldn't be taking more than 35% of anybody's money, anyway," Bush said.
The president did reiterate his core argument that when he pushed for tax cuts, he wanted to see everyone who pays taxes get relief.
"When we provided tax relief, we said, if you pay taxes, you get relief. That's not the way sometimes tax relief works in Washington. Sometimes it's, we're going to make sure only certain people get tax relief. If you're going to provide relief, it's only fair that everybody ought to get relief. That's why we reduced all rates, which seems to make sense," Bush said.
The president also said for the first time that the tax cuts he pushed through Congress helped deepen the deficits before, a few minutes later, arguing the tax cuts actually boosted government revenues.
In talking about the deficit, Bush cited the usual suspects blaming the shortfall in federal revenues both on the recession that hit during his first year in office and the cost of fighting the war on terrorism.
"Thirdly, part of the reason we have this deficit is because I believed in order to get the economy moving forward, there should be tax relief," Bush said. "And it's working."
While many economists have argued the president's first and second round of tax cuts were well timed for optimal effect, the president wasn't satisfied to leave the matter alone.
In a minute or two later, Bush reversed course and said that far from deepening the deficit, his tax cuts have resulted in an increase in federal revenues.
"The tax relief helped us generate more revenues," Bush said. As proof of this, Bush said the latest budget forecasts from the Office of Management and Budget predict the fiscal year 2004 budget deficit will be only $445 billion, down from the February estimate of $521 billion.
Certainly there's a train of economic thought that argues if you lower taxes, you ultimately achieve higher government revenues due to increased economic activity. However, there is no economic argument that states lower taxes can both reduce and raise government revenues at the same time.
As far as the deficit goes, Bush said he was optimistic if only because the economy is growing once again.
-By Alex Keto, Dow Jones Newswires; 202-862-9256; Alex.Keto@Dowjones.com
By ALEX KETOAugust 9, 2004 4:48 p.m.
A Dow Jones Newswires Analysis
WASHINGTON -- In an unscripted exchange with supporters during a campaign stop, President George W. Bush Monday offered new, and at times contradictory, views on taxes and the deficit.
Among the points he made while visiting Annadale, Va., was that the "real rich" don't pay their fair share of taxes anyway, and that the tax cuts he pushed through Congress have helped worsen the budget deficit.
Despite the comments, Bush remained committed to his overall campaign message that his tax cuts should be made permanent, and said letting the tax cuts expire would harm the economy. Nevertheless, the president's remarks likely caused his political handlers to cringe.
In his most remarkable points, Bush argued that if Democratic presidential candidate Sen. John Kerry wins the election, small businessmen and women will bear the brunt of any tax hikes he institutes.
"Just remember, when you're talking about, oh, we're just going to run up the taxes on a certain number of people - first of all, real rich people figure out how to dodge taxes," Bush said.
"And the small business owners end up paying a lot of the burden of this taxation," he added.
Kerry has said he wants to raise taxes on individuals earning more than $200,000 a year as a way to increase government revenues and to bring the deficit back under control.
Bush has said his top-end tax cuts were primarily aimed at helping small businesses retain more of their profits, but statistics don't bear him out on this claim. This is because only a small number of small businesses ever earn more than $200,000 a year.
In addition to arguing the wealthy are dodging their fair share of the tax burden, Bush also said he simply has something against the idea of boosting taxes for the wealthy.
"I want to make another point. We shouldn't be taking more than 35% of anybody's money, anyway," Bush said.
The president did reiterate his core argument that when he pushed for tax cuts, he wanted to see everyone who pays taxes get relief.
"When we provided tax relief, we said, if you pay taxes, you get relief. That's not the way sometimes tax relief works in Washington. Sometimes it's, we're going to make sure only certain people get tax relief. If you're going to provide relief, it's only fair that everybody ought to get relief. That's why we reduced all rates, which seems to make sense," Bush said.
The president also said for the first time that the tax cuts he pushed through Congress helped deepen the deficits before, a few minutes later, arguing the tax cuts actually boosted government revenues.
In talking about the deficit, Bush cited the usual suspects blaming the shortfall in federal revenues both on the recession that hit during his first year in office and the cost of fighting the war on terrorism.
"Thirdly, part of the reason we have this deficit is because I believed in order to get the economy moving forward, there should be tax relief," Bush said. "And it's working."
While many economists have argued the president's first and second round of tax cuts were well timed for optimal effect, the president wasn't satisfied to leave the matter alone.
In a minute or two later, Bush reversed course and said that far from deepening the deficit, his tax cuts have resulted in an increase in federal revenues.
"The tax relief helped us generate more revenues," Bush said. As proof of this, Bush said the latest budget forecasts from the Office of Management and Budget predict the fiscal year 2004 budget deficit will be only $445 billion, down from the February estimate of $521 billion.
Certainly there's a train of economic thought that argues if you lower taxes, you ultimately achieve higher government revenues due to increased economic activity. However, there is no economic argument that states lower taxes can both reduce and raise government revenues at the same time.
As far as the deficit goes, Bush said he was optimistic if only because the economy is growing once again.
-By Alex Keto, Dow Jones Newswires; 202-862-9256; Alex.Keto@Dowjones.com
posted by JFH @ 7:25 PM
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