,The President's Proposal To Make Tax Cuts Permanent: $2.2 Trillion Cost Poses Danger To Economy In The Long Run

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The President's Proposal To Make Tax Cuts Permanent: $2.2 Trillion Cost Poses Danger To Economy In The Long Run

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Publication Date: January 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein; Joel Friedman

Research Area: Banking and finance

Keywords: Tax code; Fiscal future; Economic projections; Income diversity

Type: Report

Abstract:

In his State of the Union address, the President announced his intention to propose to make permanent a range of tax cuts that are scheduled to expire by the end of 2010. Last year’s budget featured a similar proposal. Since then a new round of tax cuts has become law — including the reduction in the tax rates on dividends and capital gains — which increases the cost of making the tax cuts permanent. The cost has risen to a very high level — approximately $2.2 trillion over the next 10 years, including the costs of the higher interest payments that would have to be paid on the national debt.