CBO/JCT Predictions have a History of Failure

WASHINGTON – In 2003 President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA). The legislation cut income tax rates, reduced the capital gains tax rate by 25 percent and substantially reduced the double tax placed on dividends. Immediately following the tax cut, economic growth, job creation, stock prices, dividends, and personal income skyrocketed. The 2003 tax cut has been an unmitigated success and should be extended.

The Congressional Budget Office and Joint Committee on Taxation grossly underestimated total federal revenue following the 2003 tax cut. What is especially remarkable is that they did not learn from their mistake after they did the exact same thing in 1997. In both years, CBO/JCT predicted that tax cuts would lead to less federal revenue, and both times they were proven way off the mark. Opponents of tax cuts continue to cite CBO/JCT predictions, despite their long record of failure.

Congress needs to extend the lower tax rates on dividends and capital gains

How Many Times Are the Same Mistakes Going to Be Made?