Question

What effect did the tax cuts of 2003 have?

Answer 1

Answer:

To cope up with the recession in 2001, the tax cuts in 2003 were enacted by the then President Robert Bush.

Explanation:

• The income tax cut named as the Jobs and Growth Tax Relief Reconciliation Act was enacted by Bush on May 28th 2003.

• The primary intention was to end the recession occurred in 2001. This Act reduced the Capital gains tax rate from 20 to 15 percent.

• It ensured the taxpayers who were paying 10-15 percent slowly reduced to 0 tax in 2008. Small businesses were eased with tax deductions.

• This has worked effectively for the personal income tax payers and middle class.

• The gross domestic product showed betterment within a year after the implementation of this act.

Answer 2

Answer:

They caused the government to have a bigger deficit

Explanation:

McGraw Hill, Understanding Economics:

"The 2003 tax cuts put the federal government back in the same deficit spending situation as in 1993. A series of tax cuts reduced taxes in upper income brackets, and government was spending morethan it collected in taxes" (410)