September 20, 2004 | News Releases on Taxes
Bush Tax Plan Would Strengthen Economy More Than Kerry's, Study Shows
WASHINGTON, SEPT. 20, 2004
- President Bush's tax plan consistently outperforms Sen.
John Kerry's proposal-generating stronger job growth, greater
economic activity and more spending money for families, according
to a new report from The
" President Bush's plan is more
successful over the long term because it relies on supply-side tax
policy changes, where Kerry focuses most of his attention on
demand-side policy moves," said CDA Director William Beach,
director of CDA.
The Bush plan leads to significantly
stronger employment growth between 2005 and 2014 than is likely
under the Kerry plan-a difference of more than 400,000 jobs per
Under Bush's plan, gross domestic
product in 2014 would be more than $22 billion higher than under
the Kerry plan.
The Bush plan would leave families
with hundreds of dollars more disposable income each year than the
Kerry plan would.
The analysts also found that either plan would generate greater
growth than the "baseline" forecast-that is, the economic growth
that could be expected if lawmakers enacted no future changes in
tax and spending policies. Doing so would mean allowing the entire
2003 tax package to expire after 2008 and the entire 2001 package
to expire in 2010. In fact, "most of the growth likely under
Kerry's plan comes after 2011-when he generally adopts the current
Bush approach of supporting permanent tax cuts," Beach notes.
Both simulations also demonstrate that lower tax rates boost the
incomes of all Americans. But the difference is that Bush's plan
would do so by changing the incentives to work and invest; the
Kerry plan instead would make changes on the consumption side of
the economy, the report says.
The CDA report also notes that its simulation examines only the
candidates' tax proposals, not their spending plans. This, it says,
is because campaign tax proposals tend to lend themselves to this
sort of review, but spending plans rarely do.