Friday, September 03, 2010

The Lost Decade

The argument for extending the Bush tax cuts all the way to the top income levels has come down to expressions of faith, without even an attempt to consider the actual evidence. Think Progress reports this inarticulate comment from Representative Mike Pence (R-Indiana) on the Larry Kudlow show:
C’mon, we know what works. Larry, you know what works better than most Americans, and that is across-the-board marginal tax relief…
The trouble is that we have had a fairly neat experiment over the last four presidential terms. As this report from the Economic Policy Institute illustrates, the Bush tax cuts did not deliver greater prosperity for middle class Americans:

As Ezra Klein points out, the falling incomes came during relatively good times:

And note that the graph ends in 2007 -- before the Great Recession had actually begun.

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