Report: No Correlation Between Bush Tax Cuts and Job Creation

Press Release–for immediate release–November 15, 2005
Contact: Christina Kasica, 617-423-2148, ext. 119
(cell phone 617-966-0554)

Thanksgiving 2005 Report:

No Correlation Between Bush Tax Cuts
and Job Creation
Rate of Job Growth at Historic Low After 4 Years of Tax Cuts; Quality of Jobs Poor

DOWNLOAD THE REPORT HERE: Nothing to Be Thankful For (PDF, 2.53 MB).

BOSTON–As outrage in Congress stalls the Bush administration's attempts this Thanksgiving season to extend tax cuts that will primarily benefit the wealthy, a new study examines the administration's claim that tax cuts create jobs–and finds it without merit.

Evidence shows that, historically, changes in tax rates have no discernible effect on employment. Moreover, during the Bush administration, job creation since 2003 has fallen millions of jobs short of the administration's promises, and is significantly below what would normally be expected even without extraordinary economic stimulus.

"Contrary to what President Bush and his tax policymakers are saying, tax cuts do not automatically create jobs. Tax cuts are just one of many things that can affect job growth," said Liz Stanton, director of research at United for a Fair Economy (UFE) and a co-author of the report.

"President Bush's Jobs and Growth Tax Relief Reconciliation Act of 2003, far from delivering on the promises made to create 5.5 million new jobs, has carved out a new low in job recovery after a recession." said Scott Klinger, another co-author and director of UFE's tax policy group. "The president's tax-cutting policy is a failure in this regard, and we need to recognize it as such."

The report reviewed administration claims that "tax cuts create jobs" and found the following:

  • Reviewed over a six-decade period, changes in tax policy have not resulted definitively in job creation or job destruction; they have no predictable effect on jobs.

  • From June 2003 to December 2004, the administration promised its tax-cutting policy would create 5.5 million new jobs–but only 2.6 million were created, even though 4.1 million would have been expected without any special economic stimulus.

  • The weakness in job creation during an economic recovery that we are currently experiencing is unprecedented since World War II.

  • The number of good quality jobs (defined as those paying at least $16 an hour, providing employer-paid health insurance, and providing a pension) has remained flat at 25% of all workers.

  • Black employment is at 89.6%, compared to 95.2% for whites.

  • Latino workers average more than $10,000 per year less in earnings than whites, and the gap is increasing.

  • While there is no evidence that massive tax cuts create jobs, there is considerable evidence that they contribute to economy-choking deficits.

"No workers have really benefited from President Bush's tax policies, but blacks and Latinos have suffered disproportionately," said Gloribell Mota, bilingual education specialist at UFE.

"As the nation prepares for our annual feast of bounty and thanksgiving, many U.S. families will not be participating. This is because the multiple breadwinners each family needs these days don't all have jobs," said Anisha Desai, UFE's program director and a report co-author. "Of those that do, many are not making enough money to pay for turkey and trimmings for everybody in the family."

"Nothing to Be Thankful For: Tax Cuts and the Deteriorating U.S. Job Market" was co-authored by Anisha Desai, Scott Klinger, Gloribell Mota, and Liz Stanton. The authors are available for interviews by calling 617-423-2148 ext. 119, or emailing"> Call for hard copies.

United for a Fair Economy is a national non-profit that spotlights the growing economic divide in the U.S.