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Found It! Bush Tax Cuts Worth Only $98 Billion in 2011

Fern

Fern

Elite Member
Some of you may be interested.

During the past week or so, in discussing the debt ceiling etc, I had claimed to have a seen a recent CBO report that was currently estimating the cost of extending the Bush tax cuts at only $98 billion.

Finally found it. See page 9 of the 2011 CBO report linked below. Check the 1st line item labeled "Tax Rates, Credits, and Deductions Initially Enacted in 2001, 2003, and 2009". (Not sure why anything from 2009 belongs in there, Bush was already out-of-office; maybe the $98 is actually a little bit too high?)

Presumably the poor economy has led the CBO to calculate that amount to be substantial lower than their earlier estimates performed before the economy hit the crapper.

http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf

Finally found a page number reference to the almost 200 page CBO report at the below site.

Page 9 of the full CBO report shows that only $103 billion of the $390 billion is attributable to renewing the Bush tax cuts: $98 billion for “tax rates, credits, and deductions initially enacted in 2001, 2003, and 2009,” and $5 billion for estate and gift taxes.
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http://www.nationalreview.com/agenda/258107/shooting-cbo-first-and-asking-questions-later-avik-roy#

Given deficits (and thus additions to our national debt) of about $1.4 trillion per year, even repealing ALL the Bush tax cuts isn't going to get us very far.

Fern
 
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So then you agree we should just go ahead and raise them since they arent that much and its been proven that tax cuts dont increase jobs.
 
JSt0rm said:
So then you agree we should just go ahead and raise them since they arent that much and its been proven that tax cuts dont increase jobs.
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Personally, I'm OK with raising them on the wealthy given we get real spending cuts in return.

I don't think raising taxes at this time on approx 98% of Americans is politically do-able, by either party.

I'm OK with getting rid of any estate tax cuts from the Bush years, assuming they still exist.

Fern
 
"Bush Tax Cuts Worth Only $98 Billion in 2011"
Good! Then it won't hurt anyone to have them repealed.
 
Icepick said:
"Bush Tax Cuts Worth Only $98 Billion in 2011"
Good! Then it won't hurt anyone to have them repealed.
Click to expand...
So we're agreed on the definition of hurt. We'll repeal ALL the Bush tax cuts, and cut all programs which are under $98 billion.
 
C'mon guys.

The significance here is that many have acted like a repeal of the Bush tax cuts is all that's needed to get us into good financial condition.

Cutting a $1.4 trillion deficit by $98 billion is the equivalent of slowing the car from 100mph down to 93mph as you speed toward the cliff.

Much, much more is needed.

Fern
 
Fern said:
Some of you may be interested.

During the past week or so, in discussing the debt ceiling etc, I had claimed to have a seen a recent CBO report that was currently estimating the cost of extending the Bush tax cuts at only $98 billion.
Click to expand...
That's not quite what the CBO report says. It says the decrease in revenue for extending several provisions of the 2001, 2003 and 2009 tax cuts will be $98 billion in 2011. That's not a total cost by any means, and it's only for this year.
Finally found it. See page 9 of the 2011 CBO report linked below. Check the 1st line item labeled "Tax Rates, Credits, and Deductions Initially Enacted in 2001, 2003, and 2009". (Not sure why anything from 2009 belongs in there, Bush was already out-of-office; maybe the $98 is actually a little bit too high?)
Click to expand...
Again, the CBO report isn't about "the Bush tax cuts", it's about extending several provisions of several tax laws, which was done by a separate act in 2010. Including all the laws the 2010 act was extending makes perfect sense, this isn't a partisan document targeting Bush 😉
Presumably the poor economy has led the CBO to calculate that amount to be substantial lower than their earlier estimates performed before the economy hit the crapper.

http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf

Finally found a page number reference to the almost 200 page CBO report at the below site.



http://www.nationalreview.com/agenda/258107/shooting-cbo-first-and-asking-questions-later-avik-roy#

Given deficits (and thus additions to our national debt) of about $1.4 trillion per year, even repealing ALL the Bush tax cuts isn't going to get us very far.

Fern
Click to expand...

That seems like a pretty major leap to me. Almost $100 billion isn't exactly chump change (it would be a 4.4% increase in revenue in 2011 and make up about 7% of the deficit), and that's only the decrease in revenue in one year. It says nothing about the cost of holding the extra debt that would involve.

Focusing on just this year is also being a bit too selective or assuming that revenue and spending are constant year to year. The CBO report you linked projects the tax cut extensions will cost $147 billion in 2012, and the projected deficit will only be $1.1 trillion...which means the cost of the tax cuts next year, even by the standard you're using here, will represent 13.4% of the deficit spending. That seems like enough of a contributor that we can't just dismiss it, doesn't it?
 
Fern said:
C'mon guys.

The significance here is that many have acted like a repeal of the Bush tax cuts is all that's needed to get us into good financial condition.

Cutting a $1.4 trillion deficit by $98 billion is the equivalent of slowing the car from 100mph down to 93mph as you speed toward the cliff.

Much, much more is needed.

Fern
Click to expand...

I'm curious...who exactly has acted like that? Most of what I've seen is people suggesting that the Bush tax cuts contributed a lot to our current deficit issues, which really has little to do with the cost of extending them this particular year.
 
Fern said:
C'mon guys.

The significance here is that many have acted like a repeal of the Bush tax cuts is all that's needed to get us into good financial condition.

Cutting a $1.4 trillion deficit by $98 billion is the equivalent of slowing the car from 100mph down to 93mph as you speed toward the cliff.

Much, much more is needed.

Fern
Click to expand...

You give up the 98 Billion and the other side would be willing to give up something similar.
 
Gotta start somewhere. Its not like we are going to find this money in one big lump sum hiding somewhere. 98B is better than 0.

The people of our country elected these idiots into office, its part of our responsibility to fix it. If our taxes have to go up to fix a problem we created than so be it. Unfortunatly most people are too stupid to vote for and elect people who want to actually change our country for the better.
 
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I love how when we're talking about spending, it has to be the cost over 10 years, but when it's tax cuts for mostly the rich, it's yearly...


$98 billion per year comes out to... brace yourself... almost $1 trillion over 10 years.
 
Throckmorton said:
I love how when we're talking about spending, it has to be the cost over 10 years, but when it's tax cuts for mostly the rich, it's yearly...


$98 billion per year comes out to... brace yourself... almost $1 trillion over 10 years.
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Yep, and by letting them expire we can get our 1 trillion in cuts almost instantly.
 
Rainsford said:
That's not quite what the CBO report says. It says the decrease in revenue for extending several provisions of the 2001, 2003 and 2009 tax cuts will be $98 billion in 2011. That's not a total cost by any means, and it's only for this year.
Click to expand...

IIRC, Bush did two cuts, 2001 & 2003.

What do you mean that's not a total cost?

Rainsford said:
Again, the CBO report isn't about "the Bush tax cuts", it's about extending several provisions of several tax laws, which was done by a separate act in 2010. Including all the laws the 2010 act was extending makes perfect sense, this isn't a partisan document targeting Bush 😉
Click to expand...

Don't see what point you're trying to make?

Rainsford said:
That seems like a pretty major leap to me. Almost $100 billion isn't exactly chump change (it would be a 4.4% increase in revenue in 2011 and make up about 7% of the deficit), and that's only the decrease in revenue in one year. It says nothing about the cost of holding the extra debt that would involve.
Click to expand...

I think it is pretty close to "chump change' in that it is only 7% of the deficit. As I mentioned above, many here make out like just reversing those Bush tax cuts will right our ship. Clearly it's not close, we'd still have another 93% of way yet to go. In that regard, it is insubstantial.

The cost of extra debt is irrelevant here. I understand why some want to increase the cost by assuming 100% of the reduced revenue results in extra debt and then adding interest costs to it, don't necessarily agree 100%, but do understand.

However, that 'extra debt' is water under the bridge, and repealing the cuts now won't change that. That cost will keep going until we actually start paying down the debt. That is nowhere in sight.

The exercise is to demonstrate how little we can knock off the deficit. And all that there is, is the $98B. Our interest cost is going to keep escalating.

Rainsford said:
Focusing on just this year is also being a bit too selective or assuming that revenue and spending are constant year to year. The CBO report you linked projects the tax cut extensions will cost $147 billion in 2012, and the projected deficit will only be $1.1 trillion...which means the cost of the tax cuts next year, even by the standard you're using here, will represent 13.4% of the deficit spending. That seems like enough of a contributor that we can't just dismiss it, doesn't it?
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Well, yeah I'm dismissing the $147B amount (as well as that of $1.1 trillion amount). Congress submits the parameters to the CBO. Clearly, at that time, they were expecting a big rebound in the economy for next year.

Given the recent downgrade in past quarters' GDP numbers, and lowered expectations for future quarters, that seems wholly unrealistic to me ATM (and the vast majority of economic forecasts I see).

Given our system of baseline budgeting, with built-in automatic spending increases of 8% (as I understand it), IMO even an estimated $1.4 trillion deficit for next is looking pretty optimistic to me.

Fern
 
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Red Dawn said:
You give up the 98 Billion and the other side would be willing to give up something similar.
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Problem is, historically that's been a sucker's compromise. We raise taxes $100 billion, and in return you guys agree to raise spending only $300 billion, which is a $100 billion cut from the $400 billion increase you want.

Spend $100 billion less than last year, and we'll raise taxes $100 billion. Spend only $300 billion more (a $100 billion from the $400 billion increase you want) and we'll agree to cut taxes only $300 billion, which is a $100 billion decrease from the $400 billion decrease we want. Pick a set of rules and let's all play by them.

What we actually need is a balanced budget amendment that says whatever you took in last year, that's how much you can spend this year. Carve out maybe 5% to build an emergency spending fund and maybe 5% for debt reduction, and maybe we would eventually make some progress. But if we continuously couch our spending cuts in terms of what we WANT to spend, we're screwed as a nation.
 
Fern said:
I think it is pretty close to "chump change' in that it is only 7% of the deficit. As I mentioned above, many here make out like just reversing those Bush tax cuts will right our ship. Clearly it's not close, we'd still have another 93% of way yet to go. In that regard, it is insubstantial.

Fern
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I dont think most here think that. I think they just believe its a good start. Think of it as Dave Ramsey's snowball effect on paying off debt. Sure it may only be 7% but as you add more cuts to that we may one century pay off our debt.

But i also believe we must bring about massive cuts at the same time. I will not support a tax increase without big cuts as well. And i believe most here feel that way. Show me a person here who wants the Bush tax cuts to expire AND to INCREASE spending with that extra money? Now that would be assine.
 
crownjules said:
Plus, there's the fact that the taxes collected in all the years inbetween would mean less deficit in those years. And that means less interest to pay off now.
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No it doesn't (assuming I understand your point).

Whatever addition to our debt the past tax cuts added is still there, and growing.

Fern
 
Only 98 billion annually? That's really nothing @ all. Why should any attempt @ balancing the budget even be made? We should just not try. Yeah that's it. You are very smart Fern. Thanks!
 
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