The Heritage Foundation

News Releases on Taxes

February 4, 2003

February 4, 2003 | News Releases on Taxes

Heritage Web Site Offers "Reality Check" on Taxes

Would President Bush's economic growth plan help only the rich? Would it drive up federal deficits and make Medicare and Social Security reform all but impossible? How many married couples and families would save money under the Bush plan? How are dividends taxed? And who are the "rich," anyway?

There's no shortage of questions when it comes to the frequently arcane realm of tax and economic policy. Now, thanks to "Reality Check," a Heritage Foundation Internet feature launched today, there's no shortage of answers, either-quick, authoritative answers, backed up by hard facts and updated daily to reflect the latest twists in the tax-cut debate.

"The idea here is to cut through the rhetoric, to set the record straight and keep it straight," says Heritage economist William Beach. "Heritage's primary mission is to give the facts that puncture the political posturing. Like the claim that only the richest 1 percent would get a break if the double tax on dividends is eliminated. In fact, more than 84 million Americans own stock in one form or another, and all would benefit from such a cut."

They're not alone, according to "Reality Check": Under the Bush plan, 34 million Americans would see the "marriage penalty" reduced-that quirk in the tax code that forces many two-income married couples to pay more in taxes than similar couples who merely live together.

What about the claim that a big tax cut would cause government revenue to slow to a trickle and force lawmakers to slash funding for popular programs? That happened in the 1980s, right? Government figures show otherwise: In 1980, the last year before the 1981 tax cut, revenues were $956 billion (in constant 1996 dollars), notes Heritage budget expert Brian Riedl in one of the many short articles found on "Reality Check." Government revenues exceeded that amount eight times over the next 10 years. In fact, annual revenues in that decade averaged $102 billion above their 1980 level.

"The numbers here clearly show that budget deficits rose because spending rose-not because the tax cut caused government revenues to dry up," Beach says.

For more see Heritage's Reality Check.

About the Author

Related Issues: Taxes