Fiscal Implications of the 2001 and 2003 Bush Tax Cuts

The paper analyzes the effects of the 2001 and 2003 Bush tax cuts. It is found that while the administration's short-term goals in stimulating countercyclical spending were achieved, the tax cuts were less effective in promoting the longer-term goal of promoting economic growth. It is also found that the tax cuts, in combination with increased expenditures, especially on defense, significantly increased the debt burden of the United States. Finally, it is shown that the two tax cuts were regressive, disproportionately benefitting households with high incomes.