This thread does off on tangents because the original poster did not make clear just what I wrote and whose accuracy no one has shown is wrong.
Let me explain the background and the math and then maybe instead of people writing foul comments this thread will turn into a debate about facts and their significance.
Americans -- NOT the government, but the incomes of people -- fell during the 12 years that the Bush tax cuts were in effect. The total income not realized was $6.6 trillion in inflation-adjusted dollars. I'll explain the official data source I used and the methodology below. But first how this began...
The Bush campaign in 2000 promised that if elected his tax cuts would make the economy prosper. The promise was not just that you would pay less income tax, but there would be more jobs and rising incomes because of tax cuts. The campaign chose 2000 as its base year -- not me, they chose that year and said they would make us better off than we were in 2000.
In October 2000, when I was at The New York Times, I called the Bush campaign to ask about the candidate and surrogates saying we were in a recession, which they identified using Gore's name.
Did the campaign want to hedge its bets? I asked, noting that because of the Clinton-Gore recession (which had in fact begun) it might take awhile for the tax cuts to take hold, perhaps even a few years. Absolutely not, I was told and after carefully going over the nuances and the fact that events not under the control of any president might make us worse off the net answers was no ifs, ands or buts, elect George W. Bush, enact his tax cut plans and Americans will prosper through lower taxes and a robust economy with more jobs and rising incomes.
I then patiently waited until the data started to become available and tracked it year by year.
After I retired from The NYT in 2008 and began writing a column for the nonprofit, non-advertising magazine Tax Notes I looked back at the eight years of the Bush presidency. Incomes were down -- and by a lot.
The data are from the annual IRS Table 1.4 -- widely used by economists -- and adjusted for inflation and changes in the number of taxpayers. I created a year-by-year chart. This was updated when I moved on to be a columnist for the financial news service Reuters and when I moved to on to Al Jazeera America. I now write opinion columns that break news for The Daily Beast, Investopedia, USAToday and Tax Notes, among others.
The Bush tax cuts lasted 12 years. Over those 12 years Americans reported $6.6 trillion less income than if we had stayed at the level of 2000 -- the year which candidate Bush chose as his base for comparison. The fact is that we were not better off, but unlike those who argue about this or that I patiently waited for the data and then reported what it shows.
That's $48,000 per taxpayer if you average. It is enough money to have paid all the income, Social Security and Medicare taxes and with the after-tax residue to pay off every car loan, every credit card debt and every student loan in America. And after that each taxpayer would still have $17,800 left in cash.
Now to be clear those are statistical averages done to give people a sense of scale since trillions are meaningless. But no matter how you slice it incomes were down for 10 of the 12 years -- and up only a smidgen in the other two years.
You can see the final year-by-year chart and the full story from my last report on this here:
OPINION: Americans have lost out on $6.6 trillion
I also write annual detailed analysis of wages, work that no one else does.
The median wage has been stuck, after adjusting for inflation at about $28,000 or $550 a week since 1998. The median means half earned more, half less. The average wage has grown, but 77% of the wage growth from 2000 to 2012 went to the 7% of workers making $100,000 to $400,000 in 2012 dollars. Jobs above that fell in number and average pay, jobs below were basically stagnant.
Two of my reports on wages are here:
OPINION: Amid job stagnation, a prosperous class grows
OPINION: Compensation shrinks for all income groups – except the very highest
My reporting is closely read -- and critiqued -- by many of America's most informed authorities on tax policy, economics and in corporate offices. (My 1996 exposes on hidden aspects of executive pay changed the way journalists report executive compensation.)
No one -- not one person -- has shown any error in my computations. If they had I would have corrected promptly and forthrightly, as I always do.
Since I wrote my first investigative story at age 18, almost 50 years ago, my articles have saved taxpayers tons of money and prompted officials to block tax deals that Congress officially valued at more than $250 billion (note that B).
For that work I have won not just the Pulitzer and many other journalism prizes, but honors from accounting and business schools. Both Presidents Clinton and Bush made significant changes in regard to tax because of my work. Congress, and the Oregon legislature, passed laws based on my work and the California Public Utilities Commission stopped a plan to force residents to pay a tax that does not exist in law, money that would have been a stealth subsidy to one of the biggest companies in America. And despite not being a lawyer I am brought inn to lecture at accounting, business and law schools across the country and have taught tax, property and regulators law for eight years at a Syracuse University College of Law and Whitman School of Management.
I cite these facts not to boast but so that people not familiar with my work have some sense of the regard in which it is held by those deeply knowledgeable about economics, tax policy and accounting.
I am sure it is jarring for some Americans to be told that total incomes fell in 2000-2012, but that is what the official data show. And whether measured using W-2 reports on wages, IRS statistics, Census estimates or indirect measures like bank deposits and cash flows, the data are consistent in showing that Americans were worse off in 10 of the 12 years the Bush tax cuts were fully in effect with the worst results during the first Obama administration.
Our tax system does not operate the way politicians and newscasters talk about it. Had I not started an intense study of how the system actually operates more than 21 years ago I would have continued to believe what I have shown is official nonsense.
You can read how our tax system actually works in my critically acclaimed bestseller PERFECTY LEGAL, winner of the 2004 investigative book of the year award. More is in FREE LUNCH, which in 2007 revealed massive hidden subsidies to big corporations and rich individuals like Warren Buffett, and THE FINE PRINT, which is about declining competition in the market and the rise of monopolies and oligopolies.
My next book will a complete rewrite of the federal tax code tentatively titled THE PROSPERITY TAX: A New Federal Tax Code for the 21st Century Economy.
So please, how about debating the $6.6 trillion of income that people lost -- $48,000 per taxpayer -- in the years that the bush tax cuts were in full effect.
davidcay@me.com
