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KY Group: Bush Tax Cuts Extension is Deficit-Doubling Proposition

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June 10, 2011

BEREA, Ky. - This week marks the 10-year anniversary of the Bush tax cuts, and a Kentucky-based economic policy think tank says the numbers just don't add up for middle- and low-income Americans if those cuts are extended beyond next year's expiration date.

Jason Bailey, director of the Kentucky Center for Economic Policy, says an extension would double the size of the federal deficit over the next 10 years and fatten the wallets of the highest-earning taxpayers.

"Here in Kentucky, the top 1 percent of the most wealthiest Kentuckians would receive a tax cut of about $43,000. Nearly half of the tax cuts would go to the wealthiest 5 percent."

The poorest 20 percent of Kentuckians would earn about a $50 tax cut with the extension, Bailey says. The Bush-era tax cuts do little to nothing in helping the economy rebound, he says, because the wealthy, who benefit the most, have little need to spend their tax cut, unlike the average person. There's another catch, he adds.

"What we would see would be huge cuts to a range of programs that serve middle-income and low-income Americans. So Medicare and Medicaid, those sorts of programs, programs that provide basic health security, food security like food stamps, are on the chopping block."

The latest jobless numbers showing the nation's unemployment rate at 9.1 percent point to the need for policymakers to shift focus, Bailey says.

"It's time for Congress to turn its attention to the problem of job creation - and then the focus should be on helping the increased demand for goods for services on the part of consumers."

Congressional Republicans claim the benefit of the tax cuts will trickle down to working Americans.

More information is online at

Renee Shaw, Public News Service - KY