If Congress passes the latest set of President Barack Obama’s proposed tax cuts, his total will rise to well more than $1.1 trillion, or nearly two percent of GDP and close to double the size of the tax cuts enacted in President George W. Bush’s first term.
In just half of his first term, Obama has already cut taxes more than Bush did over his entire first term but the Democrat’s tax cuts are much more targeted at the middle class.
The two major pieces of tax-cutting legislation signed into law by Obama will have reduced tax revenues by about $900 billion through 2012.
The Bush tax cuts were heavily skewed toward the wealthy, with more than half of the entire benefit going only to the richest 20 percent of the population. Obama is calling for the expiration of some of those tax breaks for the rich to address our long-term fiscal imbalance.
Obama signed the American Recovery and Reinvestment Act, which included a variety of tax cuts that benefited nearly every single American household. ARRA contained the Making Work Pay tax credit that directly reduced a family’s income tax bill by up to $800, which, overall, reduced tax revenue by about $116 billion.
It included expansions of the child, earned income, American Opportunity, and first-time homebuyer tax credits. ARRA patched up the alternative minimum tax, providing $70 billion in tax cuts, and cut a wide array of business taxes, together totaling another $60 billion.
All told, the Recovery Act included $243 billion worth of tax cuts through 2012.
Nearly two years after signing his first big tax cut bill into law, Obama completely approved the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, commonly known as the December 2010 tax deal.
The biggest element of the December deal was the two-year extension of all the Bush tax cuts at a combined cost of more than $400 billion.
In addition, the deal extended a variety of business tax cuts and incentives — which reduced revenues by $150 billion — and it cut $65 billion from the estate tax, which is paid by only a very few super-wealthy, massive estates.
The December tax bill also cut the payroll tax paid by employees by two percentage points, delivering more than $110 billion in tax cuts to working Americans.
A detailed comparison of tax cuts enacted by the two presidents is online at http://www.americanprogress.org/issues/2011/09/obama_bush_taxes.html
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