We all know that the GOP is standing for fiscal responsibility on the spending side of the equation and that they'd prefer to leave the revenue side well enough alone. Under the previous administration, President George W. Bush was responsible for two tax cuts known as the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003.
What did these cuts do to tax rates? The top four marginal tax rates were all reduced as shown on this chart in 2001:
In addition, the tax rate on capital gains, dividends and estate taxes were either reduced or phased out. As well, a new bottom tax rate of 10 percent replaced the old 15 percent rate and the Child Tax Credit was raised from $500 to $1000 per child. These cuts were expected to expire at the end of 2010 but were extended by the Obama Administration.
On top of all of this, the Tax Increase Prevention and Reconciliation Act of 2005 further sought to extend the Alternative Minimum Tax reduction and extend the reduced tax on capital gains and dividends.
The folks at the Center for Budget and Policy Priorities (CBPP) calculated how much the 2001 and 2003 tax cuts added to the deficits between 2001 and 2008. Including extra interest costs resulting from the additional debt, about $1.7 trillion was added to the deficits over the aforementioned period. Looking forward, over the decade between 2009 to 2018, if the tax cuts were made permanent, an additional $4.4 trillion would be added to the deficits.
Here's another interesting but not terribly surprising fact threesome from Vote Smart:
Mr. "Deficit Hawk" Ryan voted for both Bush tax cuts and was a co-sponsor of House Resolution 2 in 2003 and House Resolution 3 in 2001 which became HR 1836. Yes, I know that there is more than one way to balance a budget, however, it is interesting to see that Mr. Ryan seems to be far better acquainted with one side of the budget equation than he is with the other.