Sep 12, 2010
Fact Check: John Boehner’s Fight for Tax Cuts for Wealthiest Would Increase the Deficit
On Face the Nation today, Republican Minority Leader John Boehner continued to fight for tax cuts for the wealthiest three percent of earners, claiming not cutting the wealthiest taxes would be “bad policy.”
RHETORIC: "I don't think that's going to help our economy," said Boehner. Going on to say it was “bad policy” to cut taxes for 97 percent of Americans. [Face the Nation, 9/12/10]
REALITY: The nonpartisan Congressional Budget Office (CBO) has written that tax cuts for the highest earners would be the least effective strategy to strengthen the country’s economy and reduce the deficit.
The CBO indicated that extending the tax cuts for high-income households in particular would rate even lower in effectiveness than extending all of the tax cuts. This is because, as CBO explained, “higher-income households … would probably save [rather than spend] a larger fraction of their increase in after-tax income.”… In short, CBO found extending the tax cuts for high-income households to be the worst of all options under discussion for preserving or creating jobs and boosting economic growth while the economy is weak. [Congressional Budget Office, Policies for Increasing Economic Growth and Employment in 2010 and 2011, January 2010; Center on Budget and Policy Priorities, 7/26/10]
If Congress extends the tax cuts for married filers with incomes above $250,000 and single filers with incomes above $200,000 — the top 2 percent of U.S. households — then deficits and debt will be about $1 trillion higher over the next ten years than if it lets them largely expire, as President Obama has proposed. In subsequent decades, extending the high-income tax cuts would increase deficits by even larger amounts. [Center on Budget and Policy Priorities, 7/26/10]