Not if you read the fine print. According to an analysis by the Treasury Department, Bush’s tax cuts may raise total national output of goods and services by 0.7%.
But is that enough to pay for the tax cuts? Not even close. An 0.7 percent increase in economic output would lead to increased tax payments of $29 billion.
Sounds impressive, right? Wrong. Making the tax cuts permanent would reduce federal revenues in 2016 by $314 billion. That is more than 10 times what the Treasury analysis suggests tax cuts would generate in increased tax revenue. While trickle-down economics might make for good politics, it’s bad economics. Growth is great, but at what price?