For awhile now, I’ve been trying to find a liberal who would explain to me how lowering the top tax rate from 39% to 35% destroyed our nation. This is especially curious seeing how tax revenue increased 25% under Bush and the rich paid a higher share of the tax burden than they did under Clinton.
Yes, total tax revenue went from $2.025T in 2000 to $2.523T in 2008. What’s even more incredible is that because of the recession Bush inherited and the fact the his upper income tax cuts weren’t passed until 2003, revenues decreased for the first 3 years of his Presidency. It wasn’t until AFTER the Bush tax cuts that revenues soared. Revenues were $1.782T in 2003, so it was nearly an $800B (or 29%) increase from the time the tax cuts were passed to 2008. And revenues as a percent of GDP also increased from 16.2% to 18.5%. (you can find the data here and more reading about how liberal tax policies have lead to the middle and lower classes paying more here)
As you can see, Bush’s problem was spending. Spending increased from $1.788T to $2.982T from 2000 to 2008. The idea that the Bush years were some laissez-faire libertarian dream is insane. Which leads to the next point.
Liberals also like to claim that the financial collapse was due to deregulation, although they can never specify what regulations. Bush drastically increased regulation. Obama somehow claims that deregulation lead to the collapse, and then brags about how he’s passed fewer regulations than Bush (Obama has passed a smaller number of regulations, but his regulations have been much costlier). But no matter which contradictory claim Obama is making on any given day, deregulation did not lead to the collapse. We were spending millions upon millions regulating Fannie and Freddie and the rest of the financial sector, we have entire departments and hundreds of people dedicated to nothing else. And don’t forget that Democrats took control of congress – and therefore the oversight committees – in 2006. Barney Frank was head of the banking committee (remember this and this). Bush wanted MORE regulation of Fannie and Freddie and Democrats blocked it.
Republicans definitely aren’t blameless. They didn’t push very hard to avert the crisis. Bush and many Republicans were enjoying the hell out of the housing bubble. Both sides were pushing policies encouraging banks to leverage themselves more and more. But it was because of Government tinkering, not unfettered free markets. Bush liked to have his fingers in everything. Even when he cut taxes, he didn’t push for tax reform like Reagan did (more on Reagan in a minute) – he liked all the deductions and credits.
So I’m still open to being convinced if, given this information, someone can explain how a tax cut from 39% to 35% caused all of our problems or if someone can specify which regulation Bush got rid of and explain how it lead to the collapse.
Now on a different topic, another annoying thing liberals have started doing is talking about how Reagan was the biggest tax raiser ever, or something. Here are the tax rates from the beginning of Reagan’s Presidency to the end.
There may have been tinkering in between, but overall Reagan passed massive net tax cuts. So to those acting like Reagan raised taxes: shut up, you’re stupid.
And even though Reagan passed huge tax rate cuts, revenues nearly doubled.