Economic Growth Plan Would Generate Growth, Jobs and Tax Revenue
March 27, 2003
The President's tax cut policies, known as the Economic Growth plan, would generate enough growth, jobs and tax revenue to cut the real cost of the plan by 57 percent compared with "static" measures which largely ignore how people respond to tax incentives, says the Heritage Foundation. This means the "cost" of the plan would be $274 billion, compared with static estimates of $638 billion.
Specifically under the full plan, the United State's economy would enjoy an annual average of:
- 844,000 new jobs from 2004 through 2013 -- job growth peaks in the first two years, with 997,000 and 1.03 million jobs coming in 2004 and 2005, respectively.
- $69 billion in additional Gross Domestic Product from 2004 through 2013, with an increase of $84 billion in GDP in 2004.
- $121 billion in additional disposable income from 2004 through 2013, with an increase of $178 billion in 2004.
- 57% feedback from 2004 through 2013, a $274 billion "cost" versus a "static" cost of $638 billion.
Incidentally, while indicating that plans such as the President's economic growth plan is the biggest engine of growth among the budget proposals, the scoring of the Congressional Budget Office indicates that proposals similar to the President's prescription drug plan have the largest drag on the economy ($400 billion in increased consumption). According to CBO, "policies that increase demand by raising government or private consumption tend to lower output in the long run because they tend to eventually decrease investment and the size of capital stock."
Source: Ralph Rector, Ph.D., and Rea Hederman, "What the CBO Director Really Said," March 25, 2003, the Heritage Foundation.
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