Looking Backward: Report Card on the Bush Tax Cuts

"I think clearly the evidence...uh, well..."

The extension of Bush-era tax cuts is still a centerpiece of GOP economic dogma around job creation and economic growth. Having been eneacted a decade ago, is there any empirical evidence that they worked?

Think Progress has posted a telling video of Tea Party-backed, first-term GOP Congressman Randy Hultgren at a town-hall being asked point blank by a constituent for evidence that the Bush tax cuts created jobs. He couldn't answer the question, stumbling over a non-response. Hultgren had good reason to stumble and evade the question.  There is no evidence that shows the tax cuts drove job creation.

A recent article by Annie Lowrey at Slate gave an unimpressive ten year "report card" on Bush's tax cuts:

(A)cording to the nonpartisan Tax Policy Center…between 2001 and 2008, the bottom 80 percent of filers received about 35 percent of the cuts. The top 20 percent received about 65 percent—and the top 1 percent alone claimed 38 percent…

During the 2001 to 2007 business cycle, America's economy enjoyed 52 straight months of job growth. But it was sluggish—in fact, the slowest rate of jobs growth on record since World War II, and just one-fifth the pace of the 1990s.

Then there's wealth. Put simply, the aughts were a decade of income stagnation: The tax cuts failed to bolster most taxpayers' earnings, even before the recession hit. Median real wages actually dropped from 2003 to 2007. Household income from business-cycle peak to business-cycle peak declined for the first time since tracking started in 1967…

Unfortunately, the tax cuts never translated into robust economic growth, either. Indeed, the aughts saw the worst growth since World War II. From 2001 to 2007, annual GDP growth averaged just 2.4 percent per year, lower than in any other postwar business cycle. The contrast is starker still when judging against the previous decade. In real terms, GDP grew half as much from 2001 to 2010 as from 1991 to 2000...

So, to recap: The Bush tax cuts were followed by low GDP growth, negative median wage growth, and little job growth. Even before the Great Recession, growth in the Bush business cycle was the weakest since World War II. And the cuts cost about $2.6 trillion between 2001 and 2010, according to the Economic Policy Institute—adding to a debt future generations of taxpayers will pay for, plus interest.