Report: No Correlation Between Bush Tax Cuts and Job Creation

Press Release–for immediate release–January 11, 2006
Contact: Christina Kasica, 617-423-2148, ext. 119
(cell phone 617-966-0554)

No Correlation Between Bush Tax Cuts and
Job Creation, Report Shows

"By cutting taxes on income, we helped create jobs," President Bush said in an address Friday to business executives at the Economic Club in Chicago.

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

BOSTON–As President Bush and his senior advisors traveled across the country this past weekend touting 2005 job growth numbers and demanding that Congress make the administration's tax cuts permanent, a study examines the administration's claim that tax cuts create jobs–and finds it without merit.

While two million jobs were created in 2005, this is 3.5 million jobs short of expectations by the President's Council of Economic Advisors, who estimate job growth at 3.1% in a normal year. Jobs grew by only 1.5% in 2005.

"The president's tax-cutting policy is a failure in regard to job creation, and we need to recognize it as such, " said Anisha Desai, program director at UFE and one of the report's co-authors. "While there is no evidence that massive tax cuts create jobs, there is considerable evidence that they contribute to economy-choking deficits."

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

  • Tax cuts have no predictable effect on employment, either in job creation or job destruction.
  • Since 2003, job creation has fallen millions of jobs short of the administration's promises.
  • The current weakness in job creation during an economic recovery is unprecedented since World War II.

The report highlighted other concerns about jobs and the economy as well. For example, 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. Significant racial disparities exist: black employment is at 89.6%, compared to 95.2% for whites. And Latino workers average more than $10,000 per year less in earnings than whites, and this gap is increasing.

The report, entitled "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.