Greenspan In Favor of Ending Bush Tax Cuts
Today, former Federal Reserve Chairman Alan Greenspan said in an interview that all of the 2001 Bush tax cuts, which he had previously supported, should be allowed to expire at the end of this year, citing the need for the increased tax revenue in efforts to decrease the federal deficit. Greenspan’s comments catapulted him into a highly controversial debate going on right now, regarding whether it should be a higher priority to lessen Americans’ tax burden or the growing US debt. Greenspan acknowledged that ending the tax cuts “probably will slow growth,” but claimed that the risks stemming from a rising debt are much greater, and that our long-term economic prospects will be grim if nothing is done to decrease the debt soon.
Greenspan's statement today comes on the heels of yesterday's Senate hearing on whether the tax cuts should be extended, which we blogged about here.
According to the Joint Committee on Taxation, it would cost the government about $2.5 trillion over ten years to continue the 2001/2003 tax cuts for people earning less than $250,000 (as in the President's 2011 Budget), averaging out to about $250 billion per year.