The Washington Post’s Weak Case for Ending the 2001/2003 Tax Cuts

Brian Riedl / July 29, 2010

In yesterday’s Washington Post, Ruth Marcus uses “quack medicine” to describe conservatives’ support for extending the 2001 and 2003 tax cuts. Yet she commits her own economic malpractice.

Ms. Marcus asserts that the tax cuts devastated tax revenues by pointing out that “tax revenue fell from 21 percent of GDP in fiscal 2000 to 17.5 percent in 2008. (I’m leaving out the recession-induced plunge, to under 15 percent this year and last.)”

This cherry-picked data is highly misleading. Her starting point (2000) was a year in which revenues reached their post-war record due in part to an untenable stock market bubble. Her end point (2008) occurred during a recession that began in December 2007. To blame that entire revenue  drop on the 2001/2003 tax cuts completely ignores the bursting of the stock market bubble as well as the recession. (more…)