IPI Publication Press Release
IPI Issue Brief
Related Publication Title:
The Fiscal Plans of Al Gore and George Bush: A Comparison
Released by Sonia Hoffman on 01/25/2001
IPI Issue Brief
Related Publication Title:
The Fiscal Plans of Al Gore and George Bush: A Comparison
Released by Sonia Hoffman on 01/25/2001
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Press Release (01/25/2001)
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Thursday, January 25, 2001
Contact: Sonia Hoffman
(888) 557-4IPI or shoffman@ipi.org
Dallas, TX: Today Federal Reserve Chairman Alan Greenspan told Congress that cutting taxes is good for America, a move that could widen the door for Bush to push his promised tax reform. According to the Institute for Policy Innovation (IPI), which has advocated for many months that tax cuts would be the best use of the now 5.6 trillion budget surplus, Bush’s plan will have positive effects on the economy.
“The Bush plan, which shaves federal taxes from today’s level of 20.1% of GDP to 19.1% would have positive effects on the economy largely due to the cut in income tax rates and elimination of the estate tax “ say IPI Senior Research Fellows Gary and Aldona Robbins in a recent IPI Issue Brief.
By 2010, would result in the following benefits:
· For every dollar of static revenue loss, Bush’s tax cuts would generate $1.80 in added output.
· The Bush tax plan would generate almost 2 million new jobs (a 1.4% increase) and raise the
stock of U.S. capital by 6.8 percent.
· The drop in marginal tax rates would raise the growth rate from 2.7 to 2.97 percent.
· The federal budget fares well under the Bush plan, with higher growth offsetting 27.3% of the
static revenue loss by 2010 and 34.2% by 2020.
“At stake is the $5.6 trillion dollar taxpayer surplus,” say the Robbins. “While Bush intends that the preponderance of the expected surplus should go to paying off the debt, the use to which the remainder is put dramatically affects the federal budget and the general economy.”
As Congress takes up tax reform, lawmakers must plan so that those surpluses are put to the best possible use, to deter us from economic slowdown and keep economic expansion going.
This information is taken from a recent IPI Issue Brief, “The Fiscal Plans of Al Gore and George Bush: A Comparison,” by Gary and Aldona Robbins. For copies or further information, visit www.ipi.org or call Sonia Hoffman at (972) 874-5139. The authors are available for interviews.
