Tax cuts: myths and realities

Other things equal, I am a tax-cutter not a tax-increaser. The leftist instinct to regard a tax increase on the rich as a good thing in itself--that is, to see a tax increase on the rich as a good thing even if the revenues were spent uselessly--repels me. Having declared that prejudice, I find nothing to disagree with in this new appraisal of the Bush tax cuts by the (left-leaning) Center on Budget Policy and Priorities.

Since 2001, the Administration and
Congress have enacted a wide array of tax cuts, including reductions in
individual income tax rates, repeal of the estate tax, and reductions
in capital gains and dividend taxes.  Nearly all of these tax cuts are
scheduled to expire by the end of 2010.  Making them permanent would
cost about $3.5 trillion over the next decade (when the cost of
additional interest on the federal debt is included).

Because important decisions about these
tax policies must be made in the next few years, it is essential to
understand their effects on deficits, the economy, and the distribution
of income.  Supporters of the tax cuts have sometimes sought to bolster
their case by understating the tax cuts’ costs, overstating their
economic effects, or minimizing their regressivity.  Here, we address
some of the myths heard most frequently in recent tax-cut debates.

The center's analysis is well worth reading in full.