If millionaires were simply paying the same level of federal income taxes as they were in the mid-1990s, the federal government would have collected an additional $65 billion in revenues in 2009. That amount of revenue over 10 years, $650 billion, exceeds the cuts to domestic discretionary programs in the budget deal. Those $600 billion in cuts will result in reduced investment in infrastructure, education, housing, public health, food and drug safety, medical research, law enforcement, and other important areas.
Proponents of the Bush tax cuts argued that lower taxes on top earners would boost the economy. That didn’t happen. The United States experienced real economic growth of 3.2 percent during the 10 years before the Bush tax cuts but only 1.7 percent since. (And this anemic growth was not just a result of the Great Recession; pre-recession growth from 2002 to 2007 averaged only 2.7 percent.) The IRS data also show the effect of the recession on middle-class families: Average income declined 14 percent from 2007 to 2009.
By Seth Hanlon, Director of Fiscal Reform at the Center for American Progress.
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