Nov. 17, 2005 – As national lawmakers consider legislation granting somewhere between $35 billion and $60 billion in tax cuts, much of it to the nationâ€™s wealthiest citizens, a progressive economic think tank yesterday released its annual Thanksgiving report asserting that the acceleration of tax cuts since 2001 has done little to create jobs while contributing to "economy-choking deficits."
According to the report, "Nothing to be Thankful for: Tax Cuts and the Deteriorating US Job Market," by United for a Fair Economy (UFE), an organization fighting for progressive taxation as a tool to lessen material inequality here and abroad, not only have tax cuts enacted during President Bushâ€™s tenure failed to create promised jobs, they have contributed to a continuing lag in job creation when compared to "normal" job growth projections.
Additionally, the report found, many of the jobs created in recent years are low-paying, "poor quality" jobs that offer less than $16 an hour and provide few, if any, benefits.
Noting that the "employment rate doesnâ€™t move to the beat of federal tax policy," the UFE report found that over a six-decade period job growth rose and fell irrespective of the direction various presidential administrations took on tax rates. In fact, job growth dipped under tax decreases enacted while Ronald Reagan and Bill Clinton held office, the report noted.
"President Bushâ€™s Jobs and Growth Tax Relief Reconciliation Act of 2003, far from delivering on the promises made to create 5.5 million new jobs, has carved out a new low in job recovery after a recession," said report co-author and UFE tax policy group director Scott Klinger in a statement accompanying the reportâ€™s release. "The presidentâ€™s tax-cutting policy is a failure in this regard, and we need to recognize it as such."
Especially galling, the UFE said, is the fact that minorities are disproportionately likely to toil in jobs paying below the national average, a social problem UFE found has been exacerbated by recent tax cuts. The report concluded that the earning gap between whites and blacks and Latinos has been accelerating for nearly a decade, with the latter group now earning an average of $10,052 less a year than white workers. Blacks fare a little better, taking in about $3,300 a year more than Latinos on average during the same period.
Recent government reports found that job creation lagged behind expected levels for October and that increases in hourly wages are not keeping up with inflation.
In a statement last month, Bush trumpeted White House tax policies, citing a 5 percent unemployment rate, record home ownership and a $1,900 increase in per capita disposable income as evidence that the tax cuts are working.