Thursday, July 27, 2006

Treasury finally admits reality regarding tax cuts

An AJC editorial, from "Even when the Bush administration tries to put the most favorable spin on its massive tax cuts, an inconvenient truth is spit out: Tax cuts don't automatically pay for themselves.

The Treasury Department acknowledges as much in a new report that touts the economic benefits of making the Bush tax cuts of 2001 and 2003 permanent. In order to keep federal debt from growing faster than the economy, 'tax relief must be financed by an offsetting change in government revenues or spending,' the agency states.

Neither option is painless. Tax cuts scheduled to expire at the end of 2010 have cost the federal treasury almost $1.1 trillion so far. That's equivalent to about 40 percent of all the money the federal government expects to spend this fiscal year, and twice the current annual defense budget."


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