February 22, 2001

IS THE BUSH TAX CUT NECESSARY TO AVOID A RECESSION?

View PDF version
View PDF of Full Report
View HTML of Full Report

If you cannot access the file through the link, right-click on the underlined text, click "Save Link As," download to your directory, and open the document in Adobe Acrobat Reader.

On February 22, the Center on Budget and Policy Priorities released a report entitled "Is the Bush Tax Cut Necessary To Avoid A Recession?" The report argues that the proposed tax cuts are not an effective policy response to economic sluggishness for several reasons.

The Bush tax cut, as proposed, is not well-suited to addressing a possible economic slowdown since it is backloaded. Even if the tax cuts were accelerated, they would be unlikely to be passed in time to address the current sluggishness in the economy. Most economists believe that with the exception of a significant recession, macroeconomic fluctuations such as a decline in the growth rate should be addressed primarily by the Federal Reserve.